School is back in session across Canada, and it’s causing rent and demand to surge in the country’s two largest cities.
In its September 2021 Rent Report, Rentals.ca stated that rents are expected to keep rising into the latter half of the year as classes resume on college and university campuses. The trend will also be driven by a “partial return to normalcy” as office towers reopen for workers. However, Rentals.ca noted that this forecast is contingent on the COVID-19 Delta variant “staying in check.”
“The rental market continued its upward trend on a national basis in August as some normalcy returns to the country,” said president of Bullpen Research & Consulting Ben Myers in a press release accompanying the report.
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“With elementary schools opening in September, there was strong rent growth for single-family properties again in August. Toronto and Vancouver are experiencing huge rental demand, especially for higher-end condos,” he added.
Leading Rentals.ca’s list of 35 Canadian cities, Vancouver continued to hang onto its first-place title as the most expensive city in the country to rent in. The price of a one-bedroom Vancouver rental slipped 0.8 per cent monthly but jumped 15.7 per cent annually to $2,167, the highest yearly increase in the one-bedroom category. Two-bedroom prices grew 0.1 per cent monthly and 12.4 per cent yearly to $3,044.
Following closely behind, one-bedroom rents in Toronto averaged $1,989 in August, up 7.2 per cent from July but down 1.2 per cent year-over-year. Two-bedroom rentals in the city reported milder monthly growth as prices rose just 0.8 per cent month-to-month and dropped 1.3 per cent yearly to $2,628.
Making up the remaining top-five priciest cities, Vaughan, Burlington and Etobicoke ranked in third to fifth place. One-bedroom rents grew from July to August for each community, averaging $1,850, $1,832 and $1,816. Two-bedroom rents also increased on a monthly basis with the exception of Etobicoke, with rents recorded at an average of $2,124, $2,205 and $2,269.
The average rent for all property types across Canada totalled $1,763 in August. Although slightly down on an annual basis by 0.3 per cent, the national rent grew 0.6 per cent month-to-month and is now up 5.2 per cent from the year’s market low of $1,675 in April. This marks the fourth consecutive month of rental price growth nationwide, but the average rent still remains $190 below the market peak set in September 2019, then $1,954.
Large rental units with three or four bedrooms continue to see high yearly price increases, which suggests that tenants expect to continue working from home in some way, Rentals.ca explained. Across Canada, the average price of a three-bedroom rental rose 3.8 per cent annually to $2,235 in August, and increased 6.8 per cent year-over-year to $2,903 for four-bedroom homes in the same month.
These price increases are greater than those reported for studio, one- and two-bedroom rental types, which recorded yearly price increases of 0.5 per cent, 1.5 per cent and two per cent last month. However, average prices for smaller units are gradually recovering, with the average one-bedroom unit now $75 more expensive per month than April’s average this year.