Canada’s rental market: trends, challenges, and what’s next

The Canadian rental market has seen some major ups and downs in recent years. From skyrocketing rent prices in big cities like Toronto and Vancouver to changing renter preferences, there’s a lot going on. According to the latest RentCafe “Canada Renter Interest Report” and insights from a Desjardins report on rent inflation, while rent hikes have been a major issue, there’s hope that the market will stabilise in the next few years — thanks to more housing supply and slower economic growth.

Renters struggling with rising rent prices

Over the past year, rental prices in Canada have been steadily climbing, putting a serious strain on renters. Data from RentCafe shows that cities like Toronto and Vancouver saw rent increases of 6-9 per cent. In 2023, the average rent for a one-bedroom apartment in Toronto was around $2,700, while Vancouver was close to $2,400. These price hikes are largely due to high demand, limited supply, and inflationary pressures.

However, Desjardins predicts that rent inflation, while still high, will start to slow down in the coming years. They forecast that rent increases will decelerate as the Canadian housing market stabilises. This slowdown is expected due to slower economic growth and an increase in housing supply, which should help ease affordability issues over time. That said, renters will continue to feel the pressure, especially in larger urban centres.