Average asking rents decline, but saving for a home remains an uphill battle
Canada’s rental market may be beginning to stabilize as renters start to take advantage of improving affordability thanks to a surge of new supply.
The average asking rent in April fell 2.8% year-over-year to $2,127, marking the seventh consecutive month of annual decline, according to new data from Rentals.ca and Urbanation. However, rents ticked up slightly on a monthly basis, up 0.4% from March, reaching a five-month high.
The rental market has shown some early signs of stabilizing, as renters are starting to take advantage of an improved affordability, “which is thanks to the record amount of new supply hitting the market,” said Urbanation president Shaun Hildebrand.
Compared to two years ago, average asking rents across Canada are still 6.2% higher, the report showed.
Breaking down by housing type, purpose-built apartment asking rents fell 0.9% year-over-year to an average of $2,105, while condominium apartment asking rents dropped 5.2% to $2,210.
Regionally, Ontario saw the largest rent decline in April, with average asking rents falling 2.7% to $2,338. Alberta followed with a 1.8% drop to $1,716, Quebec saw a 1.7% decrease to $1,976, and British Columbia recorded a 1% dip to $2,483.
While renters have seen some relief, many Canadians continue to face steep barriers to homeownership, primarily due to high down payment requirements and elevated mortgage costs.
A recent study by CPA Canada and BDO Debt Solutions found that about one-third of Canadians identify these factors as the main obstacles to buying a home, particularly in Quebec, where mortgage costs are especially high.
Findings from the 2024 Canada Mortgage and Housing Corporation (CMHC) Mortgage Consumer Survey align with this picture. On average, Canadian homebuyers take 4.2 years to save for a down payment, with 30% relying on financial gifts averaging $77,487 nationally and over $150,000 in British Columbia. Of those receiving a gift, 32% say they could not have bought a home without that support.
For buyers without financial help, the challenge is even steeper. Statistics Canada data shows the median after-tax household income in 2022 was $70,500. With an average family savings rate of 4% and no income from inheritances or asset sales, it would take nearly 15 years to save the $42,009 down payment needed for a national average-priced property.
“Even when the conditions seem right, there’s still a significant disparity in housing prices — both for buyers and renters — depending on location and the type of property,” said David-Alexandre Brassard, chief economist at CPA Canada.
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Brassard added that the pandemic dramatically impacted the real estate market: “Additional household savings were funnelled into real estate, which — along with low interest rates — drove up prices. To rein in inflation, the Bank of Canada raised interest rates, which would normally have capped or lowered real estate prices. However, since mid-2022, rapid population growth has taken over as the driving force behind real estate demand, particularly for rental properties.”
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