Rentsync National Rental Demand Report: November 2024

Demand Trends for the Canadian Market

The trend of accelerated seasonality is slowly coming to an end with monthly and yearly comparisons gradually showing less dramatic declines with each passing month. Month-over-month prospect declines have lessened to -9.3% nationally; representing the first time in the past 3 months that the decline of prospects was below 10%. This lessened monthly decline represents more typical seasonality with more dramatic declines occurring in September, followed by a less dramatic decline into October and November. As the weather continues to cool, so will rental demand nationally, with more people remaining in place and choosing to delay a move for fairer weather. 

Unique prospects are down 7.4% monthly across our top 10 markets and are down 37.2% year-over-year. The top 10 markets within our rankings continue to experience more exaggerated trends relative to the national average as is exemplified by the below-average monthly decline, while available properties are up +5.4% monthly which is above the national average of +3.1%. As the market continues to cool we will likely continue to see growing availability counts as the supply of rentals grows in the face of declining demand. 

Moving forward into the Fall season this trend is likely to continue with rental demand gradually declining, while property availability or supply is projected to grow steadily until the spring season wherein demand typically rebounds. Whether the decline continues to lessen with each passing month is too early to say however supply and demand will likely continue moving in disparate directions.

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.

Top Canadian Cities in Demand

Notable Changes in Demand Over the Past Month

Demand scores have rebounded and are up 8.1% month-over-month across our top 40 markets. This is however disconnected from active prospects which continue to show declining counts at -9.2% month-over-month. Active properties have rebounded and are up 3.1% month-over-month. All market segments experienced a drop in active prospects, with primary markets experiencing the largest overall decline in prospects down -10.2%. The top 10 markets conversely experienced a more moderate decline in prospects for the third month in a row with active prospects down -7.4% which falls 20% below the national average. Rental demand is likely to continue cooling across the country however at a lessened rate relative to what has been experienced up till September.

Month-Over-Month (M/M)

• Primary: Demand scores are up +5.9%
• Secondary: Demand scores are up +10.6%
• Tertiary: Demand scores are up +132%

Month-over-month (M/M) National demand scores were up +8.1% in October 2024 compared with September 2024. The decline of rental demand will likely continue to slow moving into the new year.

Notable Changes in Demand Over the Past Year

Annual demand comparisons, while showing stark declines year over year, also show a gradual moderation of year-over-year comparisons with October showing the smallest overall annualized decline in prospects of the previous three months. The top 10 markets similarly show lessened monthly declines at -37.2% year-over-year. This suggests that while the country as a whole is gradually seeing a lessening of the unseasonably low rental demand, Our top 10 markets continue to fare worse posing a challenge for leasing staff in these communities.

Year-Over-Year (Y/Y)

• Primary: Demand scores are down -8.7%
• Secondary: Demand scores are down -28.2%
• Tertiary: Demand scores are down -3.4%

Year-over-year (Y/Y): Within our top 40 markets demand scores are down -10.9% in October 2024 compared with October 2023. Active prospects are down -35.5% year-over-year, while properties are down -5.2%.

An Analysis of Key Canadian Markets

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.

• Primary (Populations Over 600K)
• Secondary (Populations Between 235-600K)
• Tertiary (Populations Between 100-235)

Examining these market segments individually offers a deeper understanding of demand patterns within larger population centres, and allows us to identify trends across markets.

Primary Markets (Populations >600k)

Primary Market Drill Down (M/M): October 2024 vs. September 2024

Notable Changes in Primary Markets Over The Past Month

*Overall demand scores are up +5.9% month-over-month, unique prospects are down -10.2%, and properties are up +4.0%.

Primary markets saw the largest overall decline of monthly prospects -10.2% of all market segments, however, this decline is substantially lower than that of September which saw a -22.7% decline in a single month. While the overarching trend is of declining prospects, not all primary markets experienced this phenomenon with Mississauga and Scarborough both showing monthly growth at +6.7% and +4.1% respectively. On the supply side, several markets saw outsized growth including Winnipeg +19.4%, Scarborough +9.8%, and Vancouver +8.0%. 

Primary Market Drill Down (Y/Y): October 2024 vs. October 2023

Notable Changes in Primary Market Demand Over The Past Year

*Year-over-year demand scores are down -8.7%, prospects are down -36.2%, and properties are down -8.5%.

Annual comparisons continue to show more moderate monthly declines in 2024 with each passing month likely due to 2024's slower overall leasing activity resulting in a lessened decline in overall rental demand as we enter the fall months. Traditionally after the July/ August peak in rental demand, October would see outsized declines in rental activity, whereas 2024 has seen lower overall demand, an earlier peak, and a longer period of declining demand. Most notably while all primary markets have seen annualized declines in prospect counts, Vancouver, and Winnipeg have seen the lowest rates at -15.8%, and -21.5% respectively. Within our rankings Vancouver and Ottawa both gained 4 positions, while North York and Montreal both dropped 2 positions.

Secondary Markets (Populations ~235-600k)

Secondary Markets Drill Down (M/M): October 2024 vs. September 2024

Notable Changes in Secondary Market Demand Over The Past Month

*Secondary markets demand scores are up +10.6% month-over-month, unique prospects are down -7.1%, and property counts are up +3.0%.

Secondary markets saw the most moderate declines in prospect counts of all market segments and well below the national average in the month of October. Amongst the secondary markets Halifax, Kitchener and Surrey bucked the trend and experienced monthly growth in prospect counts up +16.7%, +8.4%, and +5.5% respectively. While the remaining markets experienced an average decline of -12.6% in prospect counts monthly. Within our rankings Surrey gained 2 positions to hold the number one spot, while Victoria gained 5 spots to take on the third position in our rankings, and Kitchener gained 2 spots to take on the 5th position in our rankings.

Secondary Market Drill Down (Y/Y): October 2024 vs. October 2023

Notable Changes in Secondary Market Demand Over the Past Year

*Overall, year-over-year demand scores are down -28.2% year-over-year, with prospects down by -44.1%, and properties are down by +2.1%.

Secondary markets saw the largest overall year-over-year declines in prospect counts of all market segments. This decline in overall prospects is primarily due to several key markets which have experienced more outsized shifts in renter activity including Halifax, Etobicoke, Surrey, and London. This is not to say that these markets continue their trend with October showing a softening of annualized prospect declines relative to September suggesting that these markets are moderating as we move into the slower winter season.

Tertiary Markets (Populations ~100-235k)

Tertiary Markets Drill Down (M/M): October 2024 vs. September 2024

Notable Changes in Tertiary Market Demand Over The Past Month

*Demand scores in tertiary markets increased by +13.2% month-over-month, unique prospects are down -8.1%, and available properties are down -0.4%. 

Tertiary markets which were on a gradual rebounding trajectory with growing property counts have reversed with a slight monthly dip in the number of active properties. This is not indicative of all markets within our rankings with only 4 of the top 10 markets in our rankings showing declining property counts, While Burnaby +19% and Guelph +12.2% were the two standouts showing strong growth. In regards to prospect counts Burnaby, East York, and Sudbury all saw growth at +18.3%, +13.3%, and +4.4% respectively.

Tertiary Markets Drill Down (Y/Y): October 2024 vs. October 2023

Notable Changes in Tertiary Demand Over the Past Year

*Overall, year-over-year demand scores are down by -3.4%, unique prospects are down by -26.5%, and available properties are down -0.4%. 

Tertiary markets continue to show declining year-over-year demand scores; however, this decline is below the national average and suggests that these communities are more insulated from broader national trends. With greater relative affordability tertiary markets are less affected by the circumstances present in larger communities, specifically reduced affordability which drives renters away from signing new leases. This greater affordability however has only marginally reduced the decline experienced with all but one market (East York) which posted a +50.5% increase in unique prospects.

Conclusion

As we enter November, The Canadian rental market has shown signs that we are past the peak with rental demand decline now decelerating. The coming months will continue to see declines in unique prospects however this decline is likely to lessen with each passing month. October saw a 9.3% decline in unique prospects nationally - This being the first time in three months wherein the monthly decline of prospects was below 10%. This suggests a stabilization in the rate of seasonal cooling with the coming months likely to show continued moderation. While prospect counts continue their downward march, available properties have increased by +3.1% monthly, with the top 10 markets experiencing an above-average increase of +5.4%.

The growth in available properties combined with the continued decline of unique prospects signals that we are transitioning into a renters market. With declining demand and growing supply, renters who remain on market are in a stronger position when looking for new housing than they would have been anytime in the past 2 years.

Despite declining market demand, the moderation of monthly declines suggests a gradual return to more traditional seasonal patterns, as opposed to the steeper declines seen over the past year. Despite this, real rental demand remains significantly down year-over-year, with unique prospects down -34.7% nationally. Some markets show stronger resilience due in part to greater perceived affordability, more varied housing options, and healthier turnover rates. The vast majority of Canada’s rental landscape is characterized by fewer active renters who have become increasingly more selective in their housing decisions.

As winter approaches, marketing and leasing professionals must adapt to this gradually more competitive landscape. Attracting quality prospects requires more strategic marketing and careful differentiation of properties. With fewer renters actively seeking new accommodations, and an increasing number of availabilities, standing out amidst the crowd will be crucial to maintaining strong leasing momentum and filling vacancies through the slower months. 

Methodology

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 East York, ON received a demand score of 6.1 this month, versus 4.4 last month. East York experienced a 1.7-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 East York, ON  increased by +39% in October 2024 versus September 2024. The year-over-year demand score in East York increased by 2.2  points representing a 54% increase from October 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, East York, ON maintained the top spot in our Top Canadian Cities in Demand rankings from last month.
    
    *This report provides month-over-month rental listing data for October 2024 versus September 2024 and a year-over-year comparison from October 2024 versus October 2023. It also outlines the month-over-month and year-over-year trends in primary, secondary, and tertiary markets.