Canada’s rental housing demand continues to outpace supply

Demand for rental accommodation has continued to outpace supply for the second year in a row, according to data from the Canada Mortgage and Housing Corporation (CMHC).

According to the CMHC, this resulted in fewer available purpose-built rental apartments and lower affordability in the country’s primary rental market.

“As a result, the national vacancy rate for Canada’s primary rental market reached a new low of 1.5% in 2023, the lowest recorded rate since 1988, when CMHC began recording a national vacancy rate,” said CMHC officials.

Nationally, rent prices rose by an average of eight per cent between 2022 and 2023, which CMHC officials said is well above historical averages.

CMHC officials said more pressure is added to the situation as the Canadian rental market is facing several other challenges.

“Although most Canadian cities saw increased rental supply, it was not enough to keep pace with increased demand pressures, caused mainly by high population and employment growth,” said the CMHC. “Higher mortgage rates and persistently high home prices also continued to make it harder and less attractive for renters to transition to homeownership.”

Construction companies looking to build new units are also facing an uphill battle.

“As rental demand pushed up, the construction of new rental homes continued to be difficult for homebuilders facing higher costs for financing and construction materials, along with labour shortages,” said the CMHA.

The trend was also reflected in Cranbrook and Nelson, albeit on a smaller scale.

A breakdown of local, provincial and national data can be found below.

• Cranbrook
  • Average rent cost per month
    • 2022 – $1,065
    • 2023 – $1,247
  • Vacancy rate
    • 2022 – 0.9 per cent
    • 2023 – 1.7 per cent
  • Total rental units
    • 2022 – 1,109
    • 2023 – 1,164
• Nelson
  • Average rent cost per month
    • 2022 – $1,019
    • 2023 – $1,119
  • Vacancy rate
    • 2022 – 0.6 per cent
    • 2023 – 0.2 per cent
  • Total rental units
    • 2022 – 495
    • 2023 – 512
• British Columbia
  • Average rent cost per month
    • 2022 – $1,530
    • 2023 – $1,660
  • Vacancy rate
    • 2022 – 1.3 per cent
    • 2023 – 1.2 per cent
• Canada
  • Average rent cost per month
    • 2022 – $1,453
    • 2023 – $1,503
  • Vacancy rate
    • 2022 – 0.9 per cent
    • 2023 – 1.5 per cent