Canadian rental prices saw a national decline for the 23rd consecutive month this August. While the average asking rent across the country dropped to $2,035, specific segments in Toronto, particularly larger multi-bedroom suites, are experiencing upward price pressure .
The $3,642 price tag for Toronto three-bedroom units
Toronto's rental market is experiencing a significant divergence between small and large units.. While the citywide average asking rent dropped 1.8% to $2,571 in August,larger suites are seeing price hikes. According to a report from Rentals.ca and Urbanation, the average rent for a three-bedroom unit in Toronto rose 3.5% to $3,642, while two-bedroom units saw a slight 0.3% increase to $2,939.
This localized inflation for larger apartments suggests that the citywide average may be masking a growing scarcity of family-sized housing. As larger units become more expensive, the pressure on tenants seeking more space continues to intensify despite the broader downward trend in the city.
A $2,035 national average amidst regional extremes
National rental prices across Canada have fallen for the 23rd consecutive month , as reported by Rentals.ca. The average asking rent in the country dropped 4.8% to $2,035 in August, but this figure does not represent the experience of all Canadians.
North Vancouver remains the most expensive rental market in Canada, with an average rent of $3,036. Toronto follows behind, trailing both North Vancouver and Vancouver, which sits at $2,729. In stark contrast, St. John's, N.L., offers the most affordable options, with one-bedroom units averaging just $1,136.
U.S. trade war threats to Ontario's auto and steel sectors
Economic instability stemming from a trade war with the United States poses a significant risk to specific Canadian industrial hubs. The Rentals.ca report identifies the auto and steel communities in southwestern and central Ontario, as well as Quebec's pulp and paper towns, as primary pressure points. These regions face direct exposure that could ripple through the broader economy.
The report further suggests that the wider effects of trade tensions could impact business investment and hiring. For forestry-dependent centres in British Columbia and northern Ontario, the uncertainty could also influence the input costs required for new construction projects.
Matthew Boukall's warning on the condo-to-rental imbalance
A historical focus on condominium construction has potentially limited the availability of purpose-built rental housing across the country. Matthew Boukall, vice-president at real estate services firm Altus Group, noted that the rental industry has long been dominated by the "condo conversation."
This imbalance in development types may contribute to the rising costs seen in Toronto's multi-bedroom units. When developers prioritize condos over purpose-built rentals, the supply of long-term, stable housing for families and larger groups can become constrained, driving up prices for the remaining inventory.
Will trade war volatility stall new construction?
The potential impact of trade tensions on the construction sector remains a critical unanswered question. It is currently unclear how much the trade war will specifically depress business investment or hiring in the forestry-dependent centres of British Columbia and northern Ontario. Furthermore, the report leaves open whether the rising costs of new construction inputs will eventually reverse the 23-month decline in national rents.
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