The cost to rent a one-bedroom apartment surpassed $2,000 a month in Ottawa in August, as the average asking rent reached a record high across Canada.
New statistics from Rentals.ca show the average rent new tenants were asked to pay for a one-bedroom apartment in Ottawa last month was $2,063 a month, up 11.5 per cent from one year ago. The average asking rent for a one-bedroom apartment increased from $1,979 in July and $1,925 in May.
The average cost to rent an apartment was $2,226 a month in Ottawa in August, up 11.9 per cent from August 2022.
A bachelor apartment cost $1,686 a month, a two-bedroom apartment rented for an average of $2,535 a month, while a three-bedroom apartment rented for an average of $2,789.
Rentals.ca says the average asking rent in Canada reached a record $2,117 in August, up 1.8 per cent from July and a 9.6 per cent increase from August 2022.
“Over the last three-month period between May and August, asking rents in Canada have increased by 5.1 per cent or by an average of $103 per month,” Rentals.ca says in its monthly report.
The average asking monthly rent has increased $120 a month in Ottawa since May.
Vancouver has the highest asking monthly rent in Canada at $3,316 a month, followed by Oakville at $3,007 and Toronto at $2,898.
The average asking rent in Montreal in August was $2,001, the first time the average annual rent surpassed $2,000, according to Rentals.ca.
Ottawa had the highest month-over-month increase in asking rents among major Canadian cities, up 4.5 per cent in August from July.
Students, immigration drives demand, researcher says
The return of university and college students and a rise in immigration is driving demand for rentals in the capital, says Shaun Hildebrand, president of market research firm Urbanation.
“Generally, a lot of demand filters into the rental market during the summer as students look to secure leases prior to the start of the fall,” he told CTV News Ottawa.
“Ottawa has been one of the receipiants of high levels of immigration and non-permanent residents, so this has driven a lot of demand for rental housing and a contributing factor behind the large increase in rents.”
He also said that since more people are finding home ownership out of reach, more people are in the market for places to rent.
“One of the biggest factors behind the growth in rents has been the sharp deterioration in homeownership affordability,” Hildebrand said. “Interest rates having risen in Canada to a 22-year high; this has resulted in really the worst home ownership affordability situation in a generation, particularity for younger households, so this has put increased upward pressure on demand and less turnover in the rental stock as well, so it has contributed to low levels of supply.”
Hildebrand said that the rental supply being built is not enough to meet demand, and that barriers to development are another contributor to the cost.
“If the government can reduce taxation, lower development charges, and speed up approval timelines, I think that will go a long way towards helping to build up a healthy supply pipeline of new rental housing so we can get more balance into the market and see vacancy rates lift off the one per cent level we have been seeing.”
–With files from CTV News Ottawa’s Tyler Fleming.