Apartment rent grows faster than condo rent as new supply comes online

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The Canadian rental market is showing signs of divergence, with rents for purpose-built rental apartments rising faster than those for condominiums.

According to a report from Urbanation, which analyzes monthly listings from the website Rentals.ca, purpose-built units saw a price increase of 12.7 percent in March compared to the same period last year, averaging $2,117. In contrast, condo rents rose at a more moderate rate of 3.9 percent, reaching an average of $2,321.

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The report said the different growth rates are due to factors such as record-breaking condominium completions in certain markets, which are driving increased supply and limiting rental growth in the segment.

However, Urbanation President Shaun Hildebrand said overall rents, which rose 8.8 percent to $2,181 in March, should stabilize.

Rents in March rose 8.8% compared to last year

“As population growth slows with caps on non-permanent residents and supply increases while rental closings continue to rise, rental growth should continue to moderate to more sustainable levels,” Hildebrand said in the report.

The report also highlighted regional differences in rent trends, with Vancouver and Toronto seeing average asking rents decline to $2,993 and $2,782, respectively. Despite the declines, the regions remained the most expensive rental locations in Canada.

Average rental growth in Quebec City was the fastest in Canada at 19.3 per cent, pushing rents to $1,569. Saskatoon was another frontrunner, with an annual growth rate of 15.1 percent.

Shared apartment rents also continued their upward trend in March, averaging over $1,000 for the fourth consecutive month. British Columbia led the way with record-breaking average rents of $1,195, followed by Ontario at $1,089. Quebec and Alberta had average asking rents of $900 and $876, respectively.

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