Canada’s average rent increased by 10.9% in 2022, report shows

Canada's average rent increased by 10.9% in 2022, report shows

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Canadians faced an average annual rent increase of 10.9 percent in 2022, with a further five percent increase forecast for 2023, according to year-end data from Urbanation and

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Average monthly rent increased 12.2 percent year over year to $2,005 in December, according to the group’s monthly rent report. That was a slight drop from November.

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Of the 35 cities surveyed, Vancouver had the highest monthly rent in December, with annual increases of 16.8 percent for one-bedroom units and 17.9 percent for two-bedroom units, with average rents of $2,596 per month and $3,562 USD per month or

Toronto ranked second as the most expensive monthly rent, with annual increases of 21.3 percent ($2,457) for a one-bedroom unit and 18.1 percent ($3,215) for a two-bedroom unit.

Calgary ranked third with a compound annual increase of 22.6 percent to $1,816 per month for commercial buildings and condominiums.

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For December apartment and condo rents, Ottawa and Edmonton ranked fourth and fifth, with annual increases of 14.5 percent and 11.7 percent, respectively, while Montreal average rents rose just 6.6 percent.

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Higher borrowing costs have kept rental demand strong amid falling supply, Urbanation president Shaun Hildebrand said in the report.

“The Canadian rental market had one of its strongest years ever in 2022 and more than reversed any weakness that has emerged during the pandemic,” Hildebrand said. “Demand for rent is primarily driven by a rapidly growing population, which is finding it increasingly difficult to afford home ownership or find suitable rental accommodation. Looking ahead to 2023, rents are expected to continue to rise, but expect less strong growth as the economy slows and new rental supply rises to decades-long highs.”

According to the report, rents are expected to rise by a more moderate 5 percent in 2023 as economic and employment conditions begin to weaken following rapid rises in interest rates and record rents.

The 10.9 percent annual rental increase was determined by taking the weighted average of rents over all 12 months of 2022 and dividing by the weighted average rents over all 12 months of 2021, said.

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