The last month of 2024 saw a continuation of typical seasonality with an overall decline in rental demand. Whether it be the weather or the holiday spirit, renters increasingly ended or paused their rental searches which had the effect of declining prospect counts nationwide. The decline of active prospects accelerated marginally in December to -9.8% nationally. This bucks the trend of the previous 3 months where declines were gradually shrinking; however, this does not suggest that the market will resume its long-term decline and instead reflective of typical rental demand in December. Property counts similarly declined nationally by -2.3% monthly and -3.9% year over year.
Across our top 10 markets by demand, conditions continue to show greater moderation relative to the broader country with prospects down -2.7% monthly, and -20.7% year-over-year. While property counts were relatively flat month-over-month. While the broader country saw a contraction of demand, the top 10 markets by demand saw demand continue to stabilize suggesting a further stabilization followed by a potential resurgence in the coming months.
Primary and Tertiary markets both fared better than the national average, with secondary markets representing the vast majority of month-over-month declines in rental demand. However, the above-average decline in secondary markets, at -17.2% month-over-month, does not indicate a shift in the recent trends of moderating rental demand. It is instead likely a result of seasonality, with the previous year showing a similar rate of decline.
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 declined in the final month of the year thus putting a pause on the rebounding experienced over the previous 3 months. Across our top 40 markets, demand scores declined by -13.0% monthly, prospect counts declined by -9.0%, and active properties declined by -1.9%. The top 10 markets by demand fared considerably better with demand scores as a whole down -7.7%, prospects down -2.7%, and properties -0.6% monthly. Demand scores declined more dramatically than prospect counts this month due to several markets in our top 10 markets in demand showing growth in the average number of prospects per property; this in combination with declining demand across the remaining markets results in a decline of overall demand scores. Although rental demand scores may be in decline, we continue to see relative moderation in select markets.
Month-over-month (M/M): Within our top markets, demand scores were down -13.0% in December 2024 compared with November 2024. This decline is representative of typical December demand trends.
Annual demand comparisons while down substantially, continue to show relative moderation with each passing month. Unique prospects are down -27.8% (down from -33.3% the previous month), and active properties are down -3.3%. These conditions place the Canadian rental market squarely in the position of a renters market, with substantially fewer active renters than the previous year competing for a marginally smaller market of available properties. Regardless, the market shows signs of gradual moderation suggesting a potential end in sight for struggling properties and leasing staff.
Year-over-year (Y/Y): Within our top 40 markets demand scores are up +2.8% in December 2024 compared with December 2023. Active prospects are down -27.8% year-over-year, while properties are down -3.3%.
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 down -10.7% month-over-month, unique prospects are down -7.2%, and properties are down -1.9%.
Primary markets moved in line with the broader country with overall rental demand declining however, this segment was the only one to experience a moderation of this decline month-over-month which bucks the trend of an accelerated decline in December which represents typical seasonality. With the exception of Calgary and Mississauga all other markets in our primary markets list saw declining prospect counts. While, Scarborough, Edmonton, and Montreal saw above-average declines in prospect counts. 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 5.9%, prospects are down -28.9%, and properties are down -7.5%.
Primary markets show further moderation in annual demand comparisons with each passing month however, while the decline of rental demand does continue to moderate overall rental demand is shrinking suggesting a tightening market for active properties. With more properties competing for a constantly shrinking market of active renters; renters are in an increasingly advantageous position when searching for their next home. While all primary markets saw declining prospect counts, Scarborough, Montreal, Edmonton, and North York all showed substantially higher rates of decline than the average for primary markets.
*Secondary markets demand scores are down -25.2% month-over-month, unique prospects are down -17.2%, and property counts are up +4.5%.
Secondary markets, which in recent months have shown the greatest rates of moderation and subsequent resurgence of rental demand, saw the largest decline in active prospects of all market segments in December. Primarily driven by Victoria and Etobicoke which once again were two of the fastest-growing markets by demand in November. Although this reflects a slowing of rental demand it is likely a temporary blip with such substantial shifts in rental activity likely a result of active renters simply pausing their rental search during the holiday season. Secondary markets may very well see this decline reverse in January and once again return to their position as the fastest-growing market segment by rental demand.
*Overall, year-over-year demand scores are down -22.5% year-over-year, with prospects down by -36.8%, and properties are up by +12.3%.
While secondary markets have shown moderation in recent months, year-over-year comparisons show a stark difference from the previous year. With active prospects down -36.8%, the average number of prospects per property is down a whopping -43.7%. This represents the relative proportion of active prospective renters to available properties and highlights the significant decline in renter activity in these markets. Secondary markets have experienced a significant softening of rental demand, resulting in a more challenging environment for leasing professionals and new properties coming to market.
*Demand scores in tertiary markets decreased by -8.4% month-over-month, unique prospects are down -6.1%, and available properties are down -3.3%.
Tertiary markets saw the smallest relative decline in prospects of all market segments. Likely due to East York and Cambridge which both saw growth in prospect counts in December with the remainder of the markets in our tertiary market rankings experiencing declining prospect counts. While prospect counts are important they only tell half the story of rental demand. Several markets saw either growth in active properties, or an imbalance of the decline of prospects and properties leading to an increase in the average prospects per property in East York, Abbotsford, Burnaby, and Regina.
*Overall, year-over-year demand scores are up by +38.5%, unique prospects are down by -0.2%, and available properties are down -0.7%.
Year-over-year comparisons for tertiary markets show exceptional moderation with little downward movement in overall rental demand and a slight uptick in average prospects per property. This is however not reflective of all tertiary markets with East York representing the only market which saw growth in prospect counts and thus bringing up the average which would otherwise show an average decline of -20.8% year-over-year for the remaining markets.
While 2024 was predominantly represented by unseasonably low rental demand, we see some relief in the final months of the year with softening declines and a return to conventional seasonality in the final month of the year. Entering 2025 Canada’s rental market is defined by the typical holiday slowdown experienced each year with renters pausing their housing searches early over the colder holiday season. The decline of active prospects accelerated in December to an average of 9.0% across our markets in demand rankings, which bucks the trend set over the previous 3 months of gradually softening declines.
While both primary and tertiary markets outperformed the national average, secondary markets saw the steepest declines of prospects at -17.2% month-over-month. This is largely attributable to seasonality rather than a structural shift in rental demand trends within these communities. This pattern of rental demand decline is in line with previous years with December typically representing an acceleration of rental demand decline prior to the new year. This reinforces the expectation that rental markets will see further stabilization and rebounding in the coming year.
As we enter a new year, Canada’s rental landscape remains firmly a renters market, marked by increased competition amongst properties for a shrinking population of renters, and a growing emphasis on affordability. Although prospect counts remain lower today than a year ago, the gradual stabilization of rental demand signals a potential rebounding in the coming months. With the growing supply of rentals offering greater variety and as a result, improved affordability, marketing and leasing professionals are going to have to remain proactive in differentiating their properties from the competition to attract increasingly selective renters in a highly competitive market.
To present this data, Rentsync has determined three key calculations for each area of the report, They are as follows: