In 2024, Canada’s purpose-built rental market experienced its highest annual supply growth in over three decades. The sector grew by 4.1%, reflecting efforts to respond to sustained demand for rental housing across the country.
Key Contributors: Montréal and Calgary Outpace Averages
According to the latest CMHC Fall 2024 Rental Market Report, released in December, Montréal and Calgary played central roles in the increase, contributing more units than their historical norms. Montréal added over 14,000 new rentals, surpassing its average by 34%, while Calgary delivered nearly 7,000 units, which was 165% above its usual levels. Both cities were responding to strong demand driven by population growth, migration, and shifting preferences in housing.
Despite these increases, the majority of the new inventory was composed of higher-priced units, aimed primarily at higher-income households. These units often included updated finishes and modern amenities, which made them less accessible to renters in need of affordable housing options.
Other Census Metropolitan Areas (CMAs)
Toronto experienced the lowest rent growth among major CMAs in 2024 at 2.7%, down from 8.8% in 2023, due to rising vacancy rates and declining tenant turnover. Landlords prioritized tenant retention amid increased rental supply.
In Vancouver, rental supply growth slowed compared to recent years but remained above historical rates. However, high demand kept rent growth from slowing as much as in Toronto.
Halifax saw significant relief in its rental market due to strong supply growth and slower population increases. This led to a rise in the vacancy rate to 2.1% and a sharp decrease in rent growth to 3.8%, down from 11% in 2023.
Ottawa and Edmonton saw slight rent growth acceleration in 2024, driven by higher rent increases on turnover and for newly completed units entering the market.
Vacancy Rates Edge Higher, but Tight Market Conditions Persist
The national vacancy rate rose to 2.2% in 2024, compared to 1.5% in 2023, reflecting the impact of the added supply. Despite this increase, the rate remained below the 10-year average of 2.7%, highlighting continued tightness in rental markets.
Condominium rentals, which make up a significant share of the rental market in urban centers, saw little change in their already low vacancy rates. Across 17 census metropolitan areas, vacancy rates for rented condominiums remained at 0.9%.
These figures highlight ongoing challenges in meeting rental demand, particularly for more affordable housing options.
New Units Address Supply Shortages but Not Affordability
While the growth in rental stock provided some relief to markets under pressure, its focus on higher-priced segments limits its broader impact. Many of the new developments catered to high-income households, leaving affordability concerns largely unresolved for middle- and lower-income renters.
Overall, the historic supply increase is a notable development for Canada’s rental housing market, but there are still challenges in addressing affordability and adequately meeting the demand for middle- and low-income households.
