Montreal Rent Hit New Heights, But Signs Point To A Possible Slowdown
One local neighbourhood is seeing the steepest rise in costs. 🏠
Renters in Montreal are feeling the pinch as they face rising costs, mirroring a trend across Canada. Montreal rent has seen prices for both one and two-bedroom apartments climb. The median for a one-bedroom reached $1,590 in October, while a two-bedroom now costs $2,100, according to the new Zumper Canadian Rent Report.
Drawing on data from over a million active listings, Zumper paints a picture of the current rental landscape in Canada's top 100 cities by population, including trends in Montreal. The latest data suggests a pause in the rate of rent increases could be on the horizon, based on a pattern observed nationally over the past two months.
Rental relay and racing prices
Zumper's national rent index shows one-bedroom rents increasing by 1% to $1,894, and two-bedroom rents up by 0.3% to $2,350. Meanwhile, the national one-bedroom median rent rose by 13.7%, a slight decrease from the 13.8% increase reported previously. The national two-bedroom rent increased by 12.7%, down from 14.4%. These figures show a possible cooling period, especially as the market enters the traditionally slower moving season.
A graph of the Canadian National Rent Index, showing rising costs and a plateau in prices over the last few months.Courtesy of Zumper.
Zumper's report identifies the top five most expensive rental markets in Canada as Vancouver, Toronto, Burnaby, Victoria and Halifax.
Montreal emerged as the 16th priciest with one-bedrooms up 8.2% year over year and two-bedrooms up 16.7%. Still, the local rental market is not escalating as rapidly as some other major cities in the country.
The national rent rollercoaster
Sixteen cities in Canada reported an increase in one-bedroom rents monthly, while two saw no change, and five saw a decline. Vancouver, often leading in rental costs, has seen a decrease in rents for the second consecutive month, bringing prices back to levels seen in mid-2023.
In contrast, Toronto and Burnaby witnessed record highs in their rental markets. Halifax climbed into the top five most expensive rental markets, while Hamilton dropped out of the top ten. Kingston saw the highest monthly growth rate in rent prices at 6.2%, while Hamilton faced the largest decrease, with a 1.7% reduction.
Average asking rent in the top 25 small and mid-sized markets as of October 2023.Courtesy of Rentals.ca
The National Rent Report from Rentals.ca and Urbanation places Montreal 22nd among 35 cities for average rent in October, with one-bedroom apartments at $1,802 and two-bedrooms at $2,266. The numbers reflect an increase from the previous year, with one-bedroom rents up by 15.8% and two-bedrooms by 6.6%, highlighting the escalating rental challenges in the city.
Sky-high in Côte Saint-Luc
In Quebec, the highest rents in October were found in Montreal's Côte Saint-Luc ($2,458) and Mount Royal ($2,427) areas. Côte Saint-Luc experienced the most rapid rent increase in October, at 36.6% year-over-year. This was followed by Richmond, B.C., with a 29.1% increase, and Red Deer, Alberta, with 22.3%.
Among small and mid-sized markets, eight of the 25 fastest-growing apartment rents were in Ontario, six in Alberta, five in Quebec, and four in B.C.
A table of the average listed rent by province in November 2023.Courtesy of Rentals.ca
The Rentals.ca and Urbanation report also sheds light on the broader Canadian context gathering data from monthly listings across its Network of Internet Listing Services (ILS), which includes various property types from basements to single-detached houses.
For the sixth consecutive month, the report found average asking rents in Canada hit a new high, averaging $2,178. Over the past six months, average rents increased by 8.8%, equivalent to $175 per month. The national trend saw an annual rent growth rate of 9.9%, though slightly down from 11.1% in September.
A province-by-province play
While cities like Toronto and Vancouver are showing signs of slowing rent increases, other areas like Quebec City are seeing a surge in rental costs. Quebec City, for instance, finished 29th on the list of 35 cities, with average rents for a one-bedroom in October at $1,288 and $1,703 for a two-bedroom, marking a significant year-over-year increase.
An overhead view of Quebec City sprawl.Bakerjarvis | Dreamstime
The Rentals.ca and Urbanation report also highlights regional variations in rental trends. For instance, Alberta, Quebec, and Nova Scotia experienced concentrated rent inflation, driven by population growth and higher rents for new market entries. Alberta led the provinces with a 16.4% year-over-year increase in average asking rents. In contrast, Toronto witnessed a year-over-year decline of 0.8% in asking rents, the first annual decrease since August 2021.
Another notable trend is the significant rise in rents for shared accommodations across provinces like B.C., Alberta, Ontario, and Quebec, with a 42% increase in listings and a 19% rise in average asking rents for roommate rentals.
The average rent for shared living spaces was highest in B.C., at $1,176. In Vancouver, it averaged $1,454. Alberta saw an average of $870 for roommate listings, with Calgary at $911 and Edmonton at $737. In Ontario, shared accommodation rents were the second highest in Canada, averaging $1,068, with Toronto at $1,312 and Ottawa at $966. Montreal's average asking rent for shared spaces was $808.
A graph comparing the average asking rent for roommate rentals in major Canadian cities like Vancouver, Toronto and Montreal.Courtesy of Rentals.ca
Mounting rents, mounting concerns
Newly built rental units are entering the market at higher price points, contributing to the overall increase in average rents, with high-end rentals skewing the average rent upwards, even as older units see slower rent growth.
Affordability remains a key concern, disproportionately felt by low- and middle-income renters. In cities like Montreal, where the rental market has traditionally been more affordable, the rapid increase in rents is exacerbated by the limited availability of affordable housing units.
Looking ahead, the rental market's trajectory remains uncertain. Economic factors like inflation, interest rates, and employment levels will continue to influence rental prices. The Zumper report notes that inflation is at its highest since 1983 and if it continues to rise, rent prices could follow suit, further straining affordability.
Despite rent price increases, the possible slowdown in year-over-year growth rates offers a glimmer of hope for a stabilization in the Canadian rental market and may provide relief to renters.