Canada’s rental market, notorious for its escalating costs and limited availability, delivered somewhat of a surprise in December 2024: average asking rents fell to $2,109, a year-over-year decrease marking a 17-month low, according to the latest report from Rentals.ca and Urbanation . This dip, a 3.2% decline from December 2023, offers some relief to tenants after years of relentless increases. But experts caution that it’s not necessarily a sign of lasting affordability.
The drop in rental prices is significant in the context of recent history. In 2023, average asking rents grew by 8.6%, following an even sharper 12.1% surge in 2022. Over the last five years, rents have risen by 16.8%. Urbanation president Shaun Hildebrand attributes the recent softening to several factors: record-high apartment completions, slowing population growth, and a weakening economy.
Despite this reprieve, Canada’s housing affordability crisis remains dire. Vancouver and Toronto consistently rank among the world’s most expensive cities. For many Canadians, homeownership remains an elusive goal, exacerbated by rising interest rates and strict mortgage qualification rules.
British Columbia, the most expensive province for renters, experienced a modest 0.5% decline, with average rents hovering at $2,487.
Victoria-based real estate investor Adam Gant believes bold action is needed to tackle this crisis. Gant advocates for innovative housing solutions, including a shared equity model designed to bridge the gap between renting and homeownership.
“Shared equity could revolutionize affordability,” says Gant. “It allows renters or those unable to secure traditional mortgages to gain a foothold in the property market. Ownership isn’t just about having a roof over your head—it’s the foundation of wealth-building in Canada.”
Under Gant’s model, renters would have the opportunity to invest in a portion of the property they live in, accruing equity over time. This approach, he argues, could alleviate the financial strain on renters while also addressing the psychological and economic divide between renters and homeowners.
In BC, the gap in the share of disposable income between the top 40% and bottom 40% reached 47 percentage points, the largest gap since StatCan began collecting data in 1999. Gant believes his model would help to reduce this staggering disparity in wealth.
While December’s rental price decline offers hope, housing experts warn that systemic issues remain. Population growth could reignite demand in major cities, outpacing supply gains. Additionally, rising construction costs and high interest rates may deter developers, potentially reversing the progress seen in new apartment completions.
December’s rental market slowdown is a rare opportunity for policymakers to reassess strategies. To ensure sustained affordability, experts like Gant emphasize the need for comprehensive measures, including increased housing supply, targeted incentives for developers, and programs that make homeownership accessible to more Canadians.
“Renters are still paying a premium, and for many, the dream of owning a home feels further out of reach than ever,” Gant explains. “We need to rethink our approach to housing affordability—bold ideas and decisive action are needed to make a real difference.”
The recent decline in rental prices, while welcome, is unlikely to signal a long-term shift in Canada’s housing market. As economic uncertainty looms and regional disparities persist, renters remain vulnerable to market pressures. Policymakers, developers, and investors must work collaboratively to address the structural challenges that drive the affordability crisis. Whether through increasing supply, innovative models like shared equity, or revisiting housing regulations, Canada must act decisively to ensure housing remains within reach for all its citizens.
Veeramachineni Lalitha
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