Rent Promotions and Incentives: Trends Across 10 Canadian Cities

Written by Team Rentsync | January 19, 2024 at 5:00 AM

Promotions and incentives on vacant units vary by unit, property, and market. In this article, we delve into the data and explore how promotions and lease incentives vary by market, including the value proposition to tenants, and the most common incentives offered, across provinces and cities in Canada.

When discussing promotions and incentives we use these terms interchangeably, however, they both relate to the monetary value of concessions that a landlord is willing to offer a tenant in order to incentivize them to rent a unit, or some aspect of the lease which the landlord intends to cover and would result in a reduction in the cost of living for the tenant.

This can include overt promotions such as a rent reduction, a period of non-payment, gift cards, and gifts; along with less overt incentives such as free parking, storage, internet service, Wi-Fi, and utilities.

Promotions are calculated at the unit level based on a combination of the specific dollar values attributed to rent concessions, monetary incentives, and ancillary incentives. Concessions which do not have a direct dollar value have an estimated average value applied and extrapolated to represent the full value over a 12-month lease.

The average promotion costs provided below are meant to be an estimate only. The ranking and mention of promotions are not indicative of what all properties offer, or whether promotions are expected within that market, instead, they illustrate the typical offerings within a given market.

Promotions And Incentives Value By Province

The national average rent concession value offered is $786, which is 36% of the national average rent of $2,178 for October, according to the National Rent Report by Rentals.ca and Urbanation. All promotion estimates are reflective of the total value to a renter over a 12-month period.

Province	Average $ Concession
Ontario	$1,129
Quebec	$615
Alberta	$606
British Columbia	$592
Manitoba	$537
Saskatchewan	$385
Nova Scotia	$489
New Brunswick	$304
Newfoundland/Labrador	$534
National Average	$786

Promotions And Incentives Value By City

Toronto leads the way with the highest average promotion value due to the more common offering of free rent as a concession. Although this concession has declined in popularity since 2022 it remains a more commonly expected concession for new construction.

There is a substantial drop-off in the average incentive values elsewhere as the majority relates to the offer of utilities, or partial discounts being included in rent rather than free rent.

City	Average $ Concession	Average Rent December 2023	Concession Value As % Of Month Rent
Toronto	$1,536	$2,832	54%
Ottawa	$602	$2,228	27%
Calgary	$576	$2,071	28%
Edmonton	$574	$1,467	39%
Montréal	$524	$2,019	26%
Vancouver	$448	$3,059	15%
Winnipeg	$413	$1,558	27%
Saskatoon	$372	$1,287	29%
Regina	$369	$1,293	29%
London	$294	$2,099	14%

Most Common Promotions and Incentives By City

In nine out of ten selected Canadian cities, utilities are the most commonly offered promotion to tenants.

1. Toronto, ON

Rank	Concession Type
1	Free Rent
2	Utilities
3	Parking/Locker
4	Wi-FI/Cable
5	Gift

In Toronto, free rent offers make up almost 40% of all active concessions, pointing to a more price-orientated renter market. Utilities follow in a close second with 35%.

2. Vancouver, BC

Rank	Concession Type
1	Utilities
2	Wi-Fi/Cable
3	Parking/Locker
4	Free Rent
5	Gift

Vancouver as the most expensive rental market in Canada would in theory rank free rent as highly as Toronto however with steep competition, and limited availability; property owners are less likely to offer direct rate reductions in favour of more conventional offerings including those which address quality of life such as utilities, Wi-Fi, and parking. Regardless free rent makes the top 5 list showing the importance that discounts can have specifically for new construction.

3. Ottawa, ON

Rank	Concession Type
1	Utilities
2	Wi-Fi/Cable
3	Gift
4	Free Rent
5	Parking/Locker

In Ottawa, as with many large markets, we see a clear separation between the promotions in older stock buildings (utilities) and new construction which look to entice renters with free Wi-Fi, TV, gift cards, and lastly rent reductions.

4. Calgary, AB

Rank	Concession Type
1	Utilities
2	Gift
3	Free Rent
4	Parking/Locker
5	Wi-Fi/Cable

Similar to Ottawa, Calgary contains a large number of older properties which offer free utilities, while newer properties look to offer additional incentives to attract new leases.

5. Edmonton, BC

Rank	Concession Type
1	Utilities
2	Free Rent
3	Gift
4	Wi-Fi/Cable
5	Parking/Locker

Edmonton offers similar promotions to Calgary however, with lower achievable rents and a healthier Vacancy rate, Edmonton sees higher levels of competition amongst properties meaning that free rent offerings are meant to help properties get the edge over others for new tenants.

6. Montréal, QC

Rank	Concession Type
1	Utilities
2	Wi-Fi/Cable
3	Free Rent
4	Parking/Locker

Montréal featured no gift-style incentives, with utilities and Wi-Fi/cable offerings taking precedence over free rent offers.

7. London, ON

Rank	Concession Type
1	Utilities
2	Free Rent
3	Wi-Fi/Cable
4	Gift

London showed similar promotion rankings to Toronto, without the need for parking/storage locker incentives. A healthier rental market which offers more conventional and lower cost incentives on new leases.

8. Winnipeg, MB

Rank	Concession Type
1	Utilities
2	Wi-Fi/Cable
3	Free Rent
4	Gift

Promotions and incentives in Winnipeg are almost completely made up of utility offerings. This correlates with the extreme weather conditions in the city.

9. Saskatoon, SK

Rank	Concession Type
1	Utilities
2	Wi-Fi/Cable
3	Free Rent
4	Gift

Saskatoon sees utilities and Free Wi-Fi/ cable tied for the number one spot. Once again in a market with a lower cost of living, more affordable rents, and more variable weather conditions we see properties offering more conventional promotions for new leases.

10. Regina, SK

Rank	Concession Type
1	Utilities
2	Free Rent
3	Wi-Fi/Cable
4	Gift

In Regina, we see parking and storage completely disappear from our top rankings which is expected of a more car-dependent secondary market.

Conclusion

The national average rent concession value of $786, represents 36% of the total national average rent. Suggesting that as a general rule, the total cumulative value of concessions sits just above a third of a month's rent nationally.

New construction properties are the most likely to offer free rent concessions and this is experienced across the country. This is more common if not expected by tenants in larger and more costly communities.

Older stock rentals on the other hand more commonly offer utility concessions and even though those costs are effectively built into the cost of rent, they offer tenants the perception of savings which can go a long way to promoting new lease signing.

Ultimately, rent concessions vary by region, by market, by age, and by individual buildings. These results offer a glimpse into the broader offerings, however when it comes to determining individual building concessions property managers should always consider what their immediate competitors are offering. If used improperly concessions can result in a race to the bottom, and if used correctly they offer value to prospects and help promote new leases.

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