As the weather improves so does the demand for rentals across the country, with active prospects showing dramatic growth in March up 14.7% nationally. Up once more from the more subdued changes the month prior, March shows regaining momentum albeit moderate in rental demand across much of the country. March saw unique prospects increase dramatically all the while prospects are also submitting approximately 4% more leads individually suggesting that those on market are motivated to find adequate housing options.
Renters are increasing their online rental search activity and submitting more leads, which when combined with a lower relative increase in the number of available properties has resulted in the highest average leads per property count of the previous 6 months, and the third consecutive month of growth since average leads per property last peaked in August 2023. Average leads per property remain down -6.84 year over year suggesting that while market conditions are improving, they remain depressed relative to last year and indicating that leasing activity is unlikely to rebound as strongly as was experienced in the previous 2 years.
Although demand remains down, the overall supply of units continues to trend upwards, with more and more markets meeting our minimum property counts requirements and thus allowing them to be included within our demand rankings and calculations. Overall however the long-term tightening of market conditions, growing cost of living, and limited diversity of supply has led to a cycle of renters remaining in place for fear of having to pay higher rents, which in turn reduces turnover and limits the supply of available units thus creating tightened market conditions and as a result growing rents.
While more renters may be motivated to find a new home, they are more likely to carefully consider the prices offered to them and make their final decision based not on location and features, but on price.
As summer approaches we will see a rebounding of supply, while major markets will similarly experience the unlocking of new units which will help relieve tensions in the market, however, it remains too early to say whether this will have a meaningful impact on long-term market conditions.
In the following sections, we identify notable changes in rental demand, highlight market-specific trends, and discuss what the coming months may look like for the rental demand in Canada.
Demand scores are up month over month across the country and now leading to the renewed growth of the spring season. Across our top 40 markets, prospects are up +14.7%, Properties are up +4.2%. The top 10 markets saw more exaggerated trends with prospects up +18.4%, while properties are more muted at +1.9%. This growth in rental demand and renter activity is likely to continue and grow over the next few months as the weather continues to improve, and a greater number of renters return to market as would be expected with conventional annual demand trends.
Month-Over-Month (M/M)
Month-over-month (M/M) National demand scores up +10.0% in March 2024 compared with February 2024. March saw returned growth from February’s more muted post-holiday slowdown.
Annual demand comparisons show a stark decline in overall rental activity with prospects down -22%, average prospects per property down -13%, and active properties declining by -10.4%. Although demand scores show positive growth +25.6%, this is not directly reflective of real-world conditions and instead reflective of longer-term shifts in average prospect counts resulting in changes in the demand score divisor which shows more favourable demand scores in 2024.
Year-Over-Year (Y/Y)
Year-over-year (Y/Y): National demand scores are up +25.6% in March 2024 compared with March 2023. Comparisons of annual demand scores are not directly reflective of current market conditions, or year-over-year trends.
To provide a more detailed analysis of the rental demand in specific markets across Canada, we have segmented our market data into 3 key market segments.
Examining these market segments individually offers a deeper understanding of demand patterns within larger population centers, and allows us to identify trends across markets.
*Overall demand scores are up +11.7% month-over-month, unique prospects are up +16.5%, and properties are up +4.3%.
Primary markets saw strong growth on par with the top 40 market average. Primary markets account for 73% of renters within our top 40 ranking suggesting that as the weather continues to improve, so too will the population of active prospective renters. This initial growth will likely mark the resurgence of the annual leasing season, with continued growth in prospect counts and available properties expected in the coming months.
*Year-over-year demand scores are up +26.6%, prospects are down -22.9%, and properties are down -12.1%.
Annual market comparisons highlight the disparity between the market conditions experienced throughout 2022 and the first half of 2023, and the dramatic decline in leasing activity experienced throughout the second half of 2023 leading into 2024. Active properties are down, while prospects have declined at almost twice the rate. The long-term trend shows lessened renter activity which shows itself as reduced lead volumes for properties with this trend likely continuing well into the first half of the year.
*Secondary markets demand scores are up +2.7% month-over-month, unique prospects are up +7.3%, and property counts are up +4.5%.
Secondary markets experienced the lowest relative monthly increase in prospect counts relative to primary and tertiary markets, alongside the highest relative increase in property counts beating out the top 40 average. While most markets in our rankings showed below-average growth in prospect counts there were two exceptions, Surrey +16.5%, and Hamilton +16.3%; with the remainder of markets showing growth ranging from 2.5% to 7.2%. Victoria was also notable with a decline in active properties which resulted in average prospects per property increasing by +23.6% month over month. Secondary markets maintained their lead with the highest average prospects per property counts of all market segments at approximately 19.4 prospects per property in March.
*Overall, year-over-year demand scores are up 4.6% year-over-year, with prospects down by -28.5%, and properties down by -1.3%.
Tertiary markets saw the highest relative decline of average prospects per property of all market segments at -27.5, with the only exception being the top 10 markets in our rankings which saw average prospects per property decline by -28.8% year over year. Kitchener led this month with the highest annual decline in prospect counts at -44.3%, with Halifax coming as a close second at -43.3%; While Hamilton showed the lowest relative decline at -6.7% year over year.
*Demand scores in tertiary markets increased by +14.7% month-over-month, unique prospects are up 17.9%, and available properties are up +2.8%.
Tertiary markets maintain their growth of active prospects for the second month in a row in addition to leading the growth amongst our market segments thus bucking the broader trend of a slow February, and gradual regaining of momentum through March. Cambridge led the charge in March with prospect counts increasing by +76.7% month over month, followed by Burlington at +39.5%. Although these communities remain smaller than their primary and secondary market counterparts and as such smaller changes in renter activity can result in more dramatic shifts in calculated trends.
*Overall, year-over-year demand scores are up by +36.9%, unique prospects are down by -15.0%, and available properties are down -10.4%.
While the top 10 tertiary markets show a decline of -15% in active prospects, expanding this list to include all available tertiary markets brings this value to -18.2% year over year. This decline in broader renter activity shows the stark difference in market conditions experienced in early 2023 which was in the midst of the explosive rent growth of 2022 and 2023, and 2024 which contends with lessened demand due to a variety of factors most notably price exhaustion.
March saw rental demand return with an upswing and rebounding from February’s slowdown. Active prospects surged +14.7% after February’s more subdued change. This growth in demand reflects the positive shift in weather as we enter Spring and eventually the summer leasing season. As the weather continues to improve alongside rising temperatures renters will continue to be motivated into the market in search of new housing.
Despite these improvements, annual comparisons show that 2024 remains below the levels of rental demand experienced this past year with prospects down -22% nationally. Although more and more markets meet the minimum property counts required to be considered for our rankings, the long-term tightening of broader supply and the growing cost of living across the country has resulted in prospective renters being more discerning and cautious when submitting property inquiries.
With more and more people concerned about household affordability and security we see reduced turnover which shows itself through fewer active prospects, and fewer available units coming to market. The reduction in available units further fuels the tightening of market conditions, which in turn drives market rates higher, and in response renters who are already feeling the squeeze of inflation have no choice but to remain in place longer for fear of not being able to afford the cost of a move alongside higher monthly rents.
A vicious cycle that has properties seeing fewer incoming leads, and prospective renters more desperate than ever to find affordable housing options.
As summer continues its approach we anticipate supply to further rebound from the winter lows however remaining far below the highs of the last 2 years. Major markets will unlock new units which will provide some much-needed relief to renters however once leased these new units are unlikely to move the needle long-term with demand continuing to outpace the supply of new and available units. Renters will continue to be more selected when making housing decisions thus emphasizing the importance of competitive pricing as a tool for attracting tenants in some of Canada's less affordable housing markets. Tracking the trajectory of rental demand in the coming months will be crucial in understanding how market conditions evolve and what changes we can expect to see this upcoming leasing season.
To present this data, Rentsync has determined three key calculations for each area of the report, They are as follows:
Demand Score: Our demand score is rated out of 10 (with 10 being the highest score a city can receive), and is calculated based on unique leads per property, per city, and compared against benchmark data.
For Example Burnaby, BC received a demand score of 6.3 this month, versus 6.2 last month. Burnaby experienced a 0.1-point increase in its demand score.
Demand Percentage (% +/-): This is determined according to the year-over-year (YOY) or month-over-month (MOM) increase or decrease in unique leads per property.
For Example The month-over-month demand scores in Burnaby, BC increased +2% in March 2024 versus February 2024. The year-over-year demand score in Burnaby increased by 1.6 points representing a 34% increase from March 2023.
Position: The position is determined by unique leads per property, with cities that have at least *20 properties or more. The position will vary depending on demand.
For Example This month, Burnaby, BC achieved the top spot on our Top Canadian Cities in Demand rankings and is up 2 positions from last year's rankings.
*This report provides month-over-month rental listing data for March 2024 versus February 2024 and a year-over-year comparison from March 2024 versus March 2023. It also outlines the month-over-month and year-over-year trends in primary, secondary, and tertiary markets.