Average asking rent in Canada up 7% from a year ago, even as price growth slows

The average asking rent in Canada reached $2,185 in June, up seven per cent compared with a year ago despite representing the slowest annual rate of growth in 13 months, according to a report by Urbanation and Rentals.ca.

The slowed pace of price growth is a sign that supply and demand are rebalancingin the rental market, "and that is really good news for renters, as well as for the Bank of Canada," said Tu Nguyen, an economist at RSM Canada.

Shelter has been driving inflationfor the last year, Nguyen noted. Witha CPI basket weight of 28.57 per cent, it'scontributedmore to overall inflation than any other component measured by Statistics Canada.

Canada'sinflation rate ticked up to 2.9 per cent in May, according to the most recent data.

Average asking rents decreased 0.8 per cent from May the largest month-over-month decline since early 2021 and atypical compared with usual monthly increases this time of year, the report says.

That decrease is the result of more supply on the market as condo units built during the pandemic construction boom are completed, said Tguyen.Some analysts expect that demand will easeinto the fall due to the government's cap on temporary residents.

Based on the report, the average asking rent for a one-bedroom unit in Canada was $1,918 in June, up 7.7 per cent from a year ago, while the average asking price for a two-bedroom unit was $2,301, up 9.6 per cent.

Overall, asking rents for purpose-built rental apartments in June jumped 11 per cent compared with a year earlier to reach an average of $2,121.

Meanwhile, condominium apartment rents, which averaged $2,320, were up 2.6 per cent.

The majority of provinces recorded year-over-year increases in asking rents for purpose-built and condo rentals, led by Saskatchewan, with a 22.1 per cent gain to reach $1,339. Ontario saw a 1.3 per cent decline from a year ago to $2,382, while rents in B.C. were flat.

The report is based on an analysis of monthly listings from the Rentals.ca network.