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The average rent for a two-bedroom apartment increased at a lower rate this year of 5.4 per cent, compared to eight per cent in 2023.

Rents spiked the most when units were turned over to new tenants, resulting in rent growth of 23.5 per cent. That rate was unchanged from 2023. That can happen in provinces like Ontario, which has no rent control between tenancies in units that were first occupied after Nov. 15, 2018.

Nationally, the rented condominium apartment market remained tight in 2024. The average vacancy rate for rented condominiums in 17 census metropolitan areas surveyed by CMHC remained at 0.9 per cent in 2024, unchanged from 2023, and dropped 1.6 per cent from 2022. The average two-bedroom rent was $2,173 in 2024, up from $2,049 last year.

Tania Bourassa-Ochoa, CMHC’s deputy chief economist, said that while growth in rental supply has helped slow down rent increases, Canadians are still struggling with rising prices.

“Affordability for Canadian renters remains a challenge, particularly for new tenants who faced significant rent hikes as units turned over, limiting mobility for existing tenants and making it harder for prospective tenants to enter the market,’’ she said.

In Ontario, the CMHC notes Toronto had the lowest rent growth among major cities at 2.7 per cent, down from 8.8 per cent last year. The CMHC said this is due to rising vacancy rates and a low turnover rate.

With a record increase in rental supply, landlords prioritized tenant retention by taking a more cautious approach to rent increases, the CMHC added.

Population growth and migration

CMHC said population growth remains a significant driver of rental demand.

As of July 1, international migration reached a record high of nearly 1.2 million people over the past 12 months. However, due to a cap on international student intake in late 2024, market intelligence suggests landlords in Ontario and British Columbia may have a harder time filling vacant units this fall.

Employment

Employment conditions also softened in most markets this year, affecting younger renters under 24, CMHC added. The 25 to 44-year-old cohort also had a slightly lower employment rate. But due to stronger labour force growth, the number of employed people in this age group grew significantly, helping to sustain strong rental demand.

Implications for home ownership

Despite the recent decline in entry-level home prices, including in higher-priced markets like Toronto and Vancouver, and lower mortgage rates, renting remains a more affordable option.

Renters struggled to transition to home ownership because of additional pressures from rising nonshelter costs, CMHC said. These expenses made it more difficult to save for a down payment and to qualify for a mortgage, which led many to remain in rented homes.