Canada’s rental market experienced its strongest supply growth in over three decades, with purpose-built rental apartments increasing by 4.1% in 2024, according to the latest Rental Market Report from Canada Mortgage and Housing Corporation (CMHC). This surge in new units helped push the national vacancy rate from 1.5% in 2023 to 2.2% in 2024, offering some relief in a market that has remained persistently tight.
Despite these positive supply-side developments, affordability remains a critical issue, particularly for new tenants who continued to face steep rent hikes upon unit turnover. The average rent increase for existing tenants slowed significantly, with rents for a 2-bedroom apartment rising by 5.4% in 2024, compared to a record-breaking 8% in 2023. However, when a rental unit turned over to a new occupant, rents surged by 23.5%—a staggering figure that remained unchanged from 2023.
The market for rented condominium apartments showed little improvement in easing pressures. Vacancy rates for condos across 17 census metropolitan areas (CMAs) surveyed by CMHC remained at a low 0.9% in 2024, unchanged from the previous year and down from 1.6% in 2022. Average rents for 2-bedroom condos climbed to $2,173 in 2024, up from $2,049 in 2023.
“Affordability for Canadian renters remains a challenge, particularly for new tenants who faced significant rent hikes as units turned over, limiting mobility for existing tenants and making it harder for prospective tenants to enter the market,” said Tania Bourassa-Ochoa, CMHC’s Deputy Chief Economist.
While rising rental supply did help slow the pace of average rent growth and nudged vacancy rates closer to historical norms, Bourassa-Ochoa emphasized that sustained additions to rental inventory are essential for addressing housing affordability challenges in the long term.
Toronto recorded the lowest rent growth among major CMAs, with average rents increasing by just 2.7%, down sharply from 8.8% in 2023. Rising vacancy rates and record new rental completions enabled landlords to prioritize tenant retention, taking a more cautious approach to rent increases.
Montréal and Vancouver saw persistently high demand, despite Montréal’s record-high rental apartment completions and Vancouver’s slower but above-average rental supply growth. As a result, these cities did not experience as significant a slowdown in rent growth as Toronto.
In Calgary, rent growth outpaced all other large urban centres, driven by strong demand stemming from population growth through migration and stable economic conditions, even as unemployment ticked upward. Halifax, on the other hand, benefited from strong growth in rental supply and slower population growth, which pushed the city’s vacancy rate up to 2.1% and brought the largest year-over-year decrease in rent growth among major cities, falling from 11% in 2023 to 3.8% in 2024.
Ottawa and Edmonton deviated from the national trend, seeing slight increases in rent growth in 2024. This was primarily due to higher rents for newly completed units and significant rent hikes during tenant turnovers.
While the 2024 Rental Market Report highlights promising growth in rental supply, it underscores the persistent challenges of affordability. Rapid rent increases for new tenants continue to strain mobility for existing renters and create barriers for prospective tenants.
“Record growth in rental supply is a step in the right direction, but it’s not a cure-all,” said Bourassa-Ochoa. “Sustained and balanced growth, combined with measures to protect tenants, will be critical to addressing affordability and accessibility issues in the rental market.”
As population growth continues to fuel rental demand across Canada, policymakers and stakeholders face mounting pressure to find long-term solutions that address both supply constraints and affordability concerns.
