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One of the hottest rental markets is currently experiencing the slowest price growth of any major Canadian city
Published on December 17, 2024 • 2 minutes reading time
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A “For Rent” sign outside a home in Toronto, where rental growth has fallen from 8.8 per cent to 2.7 per cent. Photo by Cole Burston/The Canadian Press
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It was a year of slowdown for Canada's rental market, as rental prices fell in most of the country's largest urban centers. According to the Canada Mortgage and Housing Corporation (CMHC), while rising vacancy rates and increased supply provided some relief for renters, regional differences continued to shape the market.
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In Toronto, rent growth plummeted to 2.7 per cent in 2024, a significant decline from 8.8 per cent the previous year. The decline was triggered by a record increase in the supply of rental apartments, particularly condominiums, which led to a rise in vacancy rates. Low turnover rates further limited landlords' ability to raise rents, particularly on rent-controlled units. Toronto now has the lowest rental growth among Canada's largest census metropolitan areas (CMAs) – a dramatic slowdown in what was once the hottest rental market in the country. According to CMHC, “landlords in occupied units under rent control have had limited ability to increase rents above provincial guidelines.”
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In contrast, Vancouver and Montreal experienced relatively robust rental growth as demand remained strong in these markets. Montréal reported an increase in vacancy rates due to record-breaking rental closings, while supply slowed in Vancouver, but rental growth remained above historical norms as sustained demand did not slow it as much as other cities.
Calgary remained an outlier, posting the highest rent growth among major CMAs, although the rate slowed compared to previous years. Strong migration-related population growth and a growing inventory of newer rental units continued to support demand. Unlike Ontario and British Columbia, Alberta's lack of rent control policies gave landlords more options. CMHC found that “landlords had more flexibility to increase rents for existing tenants because they were not bound by rent increase policies.”
In Halifax, 2024 brought significant relief for tenants. An increase in rental housing construction and slowing population growth eased pressure on the market and caused the vacancy rate to rise to 2.1 percent – the highest level in years. Average rental growth in Halifax fell sharply from a staggering 11 percent in 2023 to 3.8 percent, marking the largest year-over-year decline among major markets.
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Meanwhile, Ottawa and Edmonton saw a slight acceleration in rental growth, bucking the national trend. Both cities benefited from stronger rental demand in 2024, allowing landlords to slightly increase rents for existing tenants while achieving higher prices for newly completed units.
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As CMHC pointed out, “stronger rental demand allowed both areas to catch up,” and this trend was particularly evident in sales and completions of newly constructed rental units. This year, rental growth in both regions was in line with the provincial average.
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