Latest Update on the Property Market

Strong Growth in Canadian Multi-Suite Residential Rental Market in Q3 2024

The Canadian multi-suite residential rental market is experiencing robust growth in the third quarter of 2024, driven by heightened sales activity and a stable economic climate, as detailed in the latest Morguard report. Sales of multi-suite residential rental properties have surged to their highest levels since early 2022, primarily due to an impressive increase in the availability of large-scale properties and portfolios. The report emphasizes that favorable financing options from the Canada Mortgage and Housing Corporation (CMHC) have been instrumental in boosting market dynamics. "This surge is tied to the growing availability of large-scale properties and portfolios," the report explained. "Attractive financing from the Canada Mortgage and Housing Corporation has been pivotal in driving this sales momentum."

Although investment in the sector continues to rise, rent growth appears to be moderating. Data from Rentals.ca indicates a 5.4% year-over-year increase in the average asking rent across Canada's 35 largest markets as of September. Nonetheless, experts anticipate that rent growth will soften soon, creating a more balanced rental landscape.

In November, the average asking rent for residential properties in Canada reached a noteworthy milestone, hitting a 15-month low of $2,139. This marks a year-over-year decline of 1.6%, following a slight decrease of 1.2% in October. However, it's essential to recognize that despite this recent dip, average rents remain 6.7% higher than two years ago and an impressive 18.8% higher than three years ago. Over the past five years, rental prices in Canada have consistently increased at a robust average rate of 3.4% per year, reflecting the market's ongoing demand and long-term growth trend.

Notably, the average asking rent for purpose-built and condominium apartments saw a modest annual decrease of 0.2% in November, now averaging $2,120. One-bedroom apartment rents declined by 1.2% compared to last year, averaging $1,921, while two-bedroom rents decreased by 1.0%, averaging $2,302. In contrast, the rental market for studios and three-bedroom apartments is showing exciting growth, with rents rising sharply by 5.0% to an average of $1,629 and 5.1% to $2,965, respectively. This indicates a resilient rental market that continues to adapt and thrive.