National rent dropped 1.2% but half of Canada still can't afford housing
Urbanation and Rentals.ca reported $2,151 as the average asking rent across all property types in late 2024, down 1.2% from the prior year. The figure marks a reversal after years of double-digit increases, but the cumulative damage remains. Rents climbed more than 20% between 2021 and 2023. A small retreat from the peak does not undo that climb.
The 1.2% decline is a national average, which means it describes almost nobody's actual experience. Different cities moved in opposite directions during the same twelve months. Some markets recorded significant year-over-year declines while others, like Edmonton, recorded increases for purpose-built apartments. Referring to a national trend when the country is splitting into different markets obscures more than it reveals.
The affordability gap is permanent, not temporary
The standard threshold for housing affordability is 30% of gross income spent on shelter costs. Roughly half of Canadian renters now exceed that threshold, and the bottom 40% of earners are the hardest hit. Wage growth has not kept pace with the rent increases of the past four years. A 1.2% drop in asking rents does not change the math for someone whose income rose 2% while their rent rose 20%.
Asking rents also differ from effective rents. The reported figures track what landlords post for vacant units. Existing tenants with rent control or long-term leases are often insulated from the extremes, at least until they move. The people who feel the national "softening" most acutely are those looking to relocate, whether by choice or necessity. For them, the dip means the next apartment costs slightly less than it would have twelve months ago, but still far more than it cost three years ago.
Alberta saw record interprovincial migration in 2023 and 2024. Edmonton remains one of the most affordable major cities in Canada, with average one-bedroom rents in the $1,500 to $1,600 range. That is well below the national average, but the gap is closing. Population inflows are tightening the market faster than new supply can absorb them.
The federal government removed GST on new purpose-built rental housing in 2023, a policy designed to increase construction. The impact on monthly rents is not yet visible in the data. Purpose-built rentals take three to five years from groundbreaking to occupancy. In a few expensive markets, demand softened temporarily while construction starts have not yet caught up with population growth. The buy-versus-rent calculation is beginning to shift as a result.
The buy-versus-rent calculation is shifting
Interest rates began declining in mid-2024 after peaking at 5% in 2023. High borrowing costs kept potential buyers in the rental market longer than they otherwise would have stayed, which drove rents up. As rates moderate and the rental market cools slightly, the arithmetic for first-time buyers is beginning to shift back toward ownership. A buyer with a down payment saved now faces lower competition and, in some markets, less pressure to overbid.
The broader issue is that the 1.2% drop follows a 20% rise. Rents are deteriorating more slowly, but the affordability crisis remains.
Urbanation and Rentals.ca reported $2,151 as the average asking rent across all property types in late 2024, down 1.2% from the prior year. The figure marks a reversal after years of double-digit increases, but the cumulative damage remains. Rents climbed more than 20% between 2021 and 2023. A small retreat from the peak does not undo that climb.
The 1.2% decline is a national average, which means it describes almost nobody's actual experience. Different cities moved in opposite directions during the same twelve months. Some markets recorded significant year-over-year declines while others, like Edmonton, recorded increases for purpose-built apartments. Referring to a national trend when the country is splitting into different markets obscures more than it reveals.
The affordability gap is permanent, not temporary
The standard threshold for housing affordability is 30% of gross income spent on shelter costs. Roughly half of Canadian renters now exceed that threshold, and the bottom 40% of earners are the hardest hit. Wage growth has not kept pace with the rent increases of the past four years. A 1.2% drop in asking rents does not change the math for someone whose income rose 2% while their rent rose 20%.
Asking rents also differ from effective rents. The reported figures track what landlords post for vacant units. Existing tenants with rent control or long-term leases are often insulated from the extremes, at least until they move. The people who feel the national "softening" most acutely are those looking to relocate, whether by choice or necessity. For them, the dip means the next apartment costs slightly less than it would have twelve months ago, but still far more than it cost three years ago.
Alberta's rental market reflects migration pressure
Alberta saw record interprovincial migration in 2023 and 2024. Edmonton remains one of the most affordable major cities in Canada, with average one-bedroom rents in the $1,500 to $1,600 range. That is well below the national average, but the gap is closing. Population inflows are tightening the market faster than new supply can absorb them.
The federal government removed GST on new purpose-built rental housing in 2023, a policy designed to increase construction. The impact on monthly rents is not yet visible in the data. Purpose-built rentals take three to five years from groundbreaking to occupancy. In a few expensive markets, demand softened temporarily while construction starts have not yet caught up with population growth. The buy-versus-rent calculation is beginning to shift as a result.
The buy-versus-rent calculation is shifting
Interest rates began declining in mid-2024 after peaking at 5% in 2023. High borrowing costs kept potential buyers in the rental market longer than they otherwise would have stayed, which drove rents up. As rates moderate and the rental market cools slightly, the arithmetic for first-time buyers is beginning to shift back toward ownership. A buyer with a down payment saved now faces lower competition and, in some markets, less pressure to overbid.
The broader issue is that the 1.2% drop follows a 20% rise. Rents are deteriorating more slowly, but the affordability crisis remains.
Sources
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