Market Update for August 27th

It was once common to only hear of bidding wars happening in traditional housing markets, however, in the lead up to this fall’s anticipated return to offices and post-secondary campuses, bidding wars for rental properties have become the norm in Vancouver and Toronto, two of Canada’s most competitive markets.

With tenants continuing to show a preference for larger suites — likely due to the number of people working from home — average prices for two-bedroom condominiums and rental apartments are increasing faster than one-bedrooms, according to Rentals.ca’s and Bullpen Research and Consulting’s latest national Rent Report. According to the report, the average rent in Canada increased for the third month in a row, rising to $1,752 in July, up 1.8% month-over-month. While this is still down 1.1% year-over-year, rents are trending upward: In April, average annual rents were down 9% annually, 5.7% in May, and 2.7% in June.

The luxury rental market is returning, pulling average rental rates up with it. Out of the 35 cities across Canada analyzed in the report, Vancouver maintained its position as the country’s most expensive rental city. Toronto finished second on the list, with one-bedroom rents rising 1% monthly, but falling 9% annually to $1,855. Two-bedroom rentals also increased 4.2% month-over-month and down 3.2% annually to $2,606.

However, the report found that larger and more centrally located luxury units in Toronto are increasing in demand and price at a faster rate than smaller, more affordable units. This continues to strengthen the idea that more and more tenants are searching for larger living spaces to accommodate working from home and going out less. As the average monthly rental rates for larger units continue to recover, so will the overall rental market, reads the report.