As we enter the colder months of the year rental demand continues to trend downwards however this decline continues to shrink with each passing month. Month-over-month active prospects have declined by -8.2% nationally, representing the second consecutive month wherein monthly declines shrunk and were sub 10%. This gradual flattening of rental demand declines is representative of typical seasonality with the steepest declines occurring in early Fall, with November through December showing greater relative stability. Regardless of whether due to seasonality, there is a rebounding of rental demand in many secondary and tertiary markets.
Across our top 10 markets by demand, unique prospects were down -6.0% monthly and -28.6% year-over-year. The top 10 markets continue to show a lower relative decline relative to the broader country, with stronger resilience and higher relative rental demand. Similarly, while the broader country has seen a continued decline in property counts of -1.1% nationally, the top 10 markets saw relative stability, with properties up 0.2% monthly.
The long-term changes in Canada’s rental market have resulted in a broader shift now squarely in what would be considered a renters market. Although there are fewer active renters on the market, November did see, for the first time in recent months, an uptick in the average number of prospects per property, suggesting slight moderation.
This uptick was only experienced in smaller rural and ex-urban communities, along with secondary markets which have benefited from the redirection of rental demand from primary markets. Some renters seek greater affordability by moving to smaller outlying communities. As the market continues to cool, we will likely see growing availability counts as the supply of rentals grows in the face of declining demand nationally.
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 continue to rebound for the second consecutive month up +3.8% month-over-month across our top 40 markets. This is disconnected from the specific demand posed by active renters which continues to decline down -7.3% monthly. The growth in demand scores is due to the long-term trend of declining prospect counts across the country; with scores being recalculated using lower thresholds thus resulting in a slight moderation in overall demand scores. Active properties across our top 40 markets are down -0.6% monthly and -1.1% nationally. The top 10 markets conversely experienced a more moderate decline in prospects for the fourth month in a row with active prospects down -6.0%; well below the national average.
Month-over-month (M/M): Within our top markets, demand scores were up +3.8% in November 2024 compared with October 2024. Unique prospects are likely to continue trending.
Annual demand comparisons show a stark decline in overall rental demand with unique prospects down -33.3% annually, while properties are down -5.1%. With conditions placing us squarely amid a renters market, the decline in active properties is likely the result of the overall decline in leasing activity resulting in declining turnover and reducing the number of units that would otherwise be in circulation. Although demand is down annually, there are signs of moderation with each consecutive month showing lower relative declines than the last suggesting that the market may be stabilizing into the winter months.
Year-over-year (Y/Y): Within our top 40 markets demand scores are up +2.6% in November 2024 compared with November 2023. Active prospects are down -33.3% year-over-year, while properties are down -5.1%.
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 centres, and allows us to identify trends across markets.
*Overall demand scores are up +1.4% month-over-month, unique prospects are down -10.9%, and properties are down -2.1%.
Primary markets were the only market segment in November to experience an acceleration in the decline of active prospects from the previous month; November saw a decline of -10.9% while October saw a monthly decline of -10.2%. Primary markets also saw the largest overall decline in active properties down -2.1% and the average number of prospects per property -9.0% monthly. These communities continue to be at the receiving end of affordability concerns by many renters who show a greater willingness for alternatives to moving within the community. This results in many renters choosing to remain in place, along with many interested in moving to outlying secondary markets in search of greater affordability.
*Year-over-year demand scores are up 5.3%, prospects are down -34.9%, and properties are down -9.8%.
Primary markets continue to show a lessened relative decline with each passing month and is a positive indicator as November typically represents the first month of relative stability post-summer decline. While overall prospects and active properties remain down year-over-year across all ten primary markets, the following show below average including Vancouver, Toronto, Ottawa, Winnipeg, and Edmonton. These communities while down annually represent greater relative rental demand and resilience in the face of a slowing rental market.
*Secondary markets demand scores are up +14.8% month-over-month, unique prospects are up 4.4%, and property counts are up +1.4%.
Secondary markets were the only market segment which saw unseasonal growth in rental demand in November. With unique prospects up +4.4 monthly and average prospects per property up +3.0% these communities are seeing a resurgence in rental demand unlike that of the broader country. Although not all markets in this segment have shown improvement even those that have declined show greater relative stability monthly. Amongst secondary markets, there were several standouts by prospect growth including Etobicoke +13.6%, Victoria +16.4%, and London +27.6%.
*Overall, year-over-year demand scores are down -16.0% year-over-year, with prospects down by -35.2%, and properties are up by +12.6%.
Year-over-year comparisons for secondary markets continue to show the largest overall decline in prospect counts of all market segments. This outsized decline in unique prospects is primarily due to several key markets which on an annual basis saw the most dramatic declines in prospects including Etobicoke, Surrey, Halifax, and Kitchener. On the other hand, Victoria stands out with a minimal decline of only -4.3%. As a whole November continues the trend of softening annual prospect declines suggesting that these markets are experiencing moderation in rental demand into the new year.
*Demand scores in tertiary markets increased by +10.7% month-over-month, unique prospects are down -0.4%, and available properties are up 0.2%.
Tertiary markets came second only to secondary markets in regard to rebounding rental demand. Several key markets showed substantial growth in monthly prospect counts including East York +19.4%, St. Catharines +15.9%, Guelph +9.0%, Cambridge +25.6%, and Kingston +10.7%. In addition, many of these communities are also seeing growth in active properties suggesting that they may be gradually returning to a healthier state of rental demand.
*Overall, year-over-year demand scores are up by +22.0%, unique prospects are down by -16.8%, and available properties are down -0.5%.
Tertiary markets continue to show annual declines in rental demand albeit at a lower rate relative to the national average. While as a whole these communities show declining prospect counts two standouts are Sudbury which saw relative stability in prospect counts +1.0% annually, and East York which has almost doubled prospect counts from last year up +71.5%. Additionally except for St. Catharines, Burlington, and Cambridge, all other markets which all saw declining property counts; the remaining markets in our top 10 all saw stable or growing property counts.
It may be too early to say that we are seeing the light at the end of the tunnel. However, November was a month of growth, with many secondary and tertiary markets showing strong growth. With active prospects growing across many markets near larger primary markets and those independently located, rental demand looks as if it is gradually rebounding after seven consecutive months of rent declines and over a year of softening demand figures.
While rental demand is moderating for the second consecutive month, active prospects nationally are down -8.2% which represents a continued flattening of monthly declines. Across the top 10 markets by demand scores, unique prospects dropped by -6.0% monthly, and -28.6% annually; demonstrating greater resilience relative to the national average which saw an annual decline of -33.3%. Additionally amongst the top 10 markets in demand rankings available properties were relatively stable with a slight increase of +0.2%.
Most notably in November, many secondary and tertiary markets saw significant rebounding in prospect counts. With a mix of standalone communities and those near larger urban centres; prospective renters are moving towards more affordable markets. Households unable to delay a move any longer are showing a strong preference for outlying communities which offer increased affordability as they search for their next home.
Looking ahead, Canada’s rental market remains firmly a renters market. Characterized by strong competition amongst available properties for the limited population of active renters.
While monthly prospect counts are rebounding in many markets, they nonetheless remain down year over year across much of the country, and with rental supply now gradually rebounding it is becoming increasingly more important to differentiate properties for increasingly more selective renters. Strategic marketing particularly in urban centres continues to be the most important factor in filling vacancies especially as we enter the slower winter months.
To present this data, Rentsync has determined three key calculations for each area of the report, They are as follows: