While rent increases have slowed, affordability remains a significant challenge for renters, according to a report released by the Canada Mortgage and Housing Corporation (CMHC).
Blacklock's Reporter says the agency’s Rental Market Report noted that rent growth for apartments eased in 2024 but still outpaced wage growth for core renters aged 25 to 44.
“Despite slower rent growth in 2024, there has been no improvement in affordability,” the report stated.
Average rent for two-bedroom units rose by 5.4%, down from the record 8% increase in 2023. Analysts attributed the lack of relief to the introduction of higher-priced rental stock, which remains out of reach for many households.
“The increase in rental stock was driven by newly completed, higher-priced units which were unaffordable for many renters and primarily served higher-income households,” CMHC analysts wrote.
Among major cities, Montréal offered the most affordable two-bedroom rentals, averaging $1,176 per month. Other cities followed with Regina at $1,415, Saskatoon at $1,471, and Winnipeg at $1,507. At the higher end, rents averaged $1,882 in Calgary, $1,974 in Toronto, and $2,314 in Vancouver.
The report also highlighted strong demand for rental housing. “Demand remained high,” it said, “however the highest supply growth in over three decades outpaced it.”
The findings come nearly a year after Parliament passed Bill C-56, which introduced a Goods and Services Tax (GST) holiday on new purpose-built rental housing. The legislation, enacted on December 15, 2023, aims to incentivize the construction of more rental units by 2036.
The Department of Finance estimated the tax break would cost $4.5 billion over five years, though the Parliamentary Budget Office placed the figure closer to $5.8 billion. Eligible buildings must include at least four apartments or 10 suites, with 90% of units rented to long-term tenants.
Despite the initiative, the CMHC and federal officials have not provided a clear estimate of how many new rental units the tax holiday is expected to create.
“I don’t have a specific figure to give you,” CMHC Chief Economist Bob Dugan told the Senate finance committee in 2023. “I think this is something that will help.”