Amidst the continuous rise in interest rates and economic challenges, the average asking price for rental units in Canada reached another record high of $2,078 in July, according to the latest rental report from Rentals.ca.

This increase follows a new record set in June, where the 1.8 percent increase in the average asking rents for June represents the fastest monthly growth in the past eight months.

According to the report published on Thursday, July experienced the fastest growth pace in the past three months, with a year-over-year increase of 8.9 percent in rents.

Furthermore, the report states that the average asking rents in Canada have increased by 21 percent compared to the same period in 2021, resulting in an additional average monthly expense of $354.

Douglas Kwan, the Director of Advocacy and Legal Services at the Ontario Tenant Defense Center, which advocates for tenant rights, said, "I wouldn't be surprised at all if the average asking rent jumps to $3,500 next year in Ontario. There seems to be no sign that this crisis will ease or alleviate."

Kwan routinely sees tenants shocked by the proposed rent increases from landlords or the figures they see on advertisements. In one case, a family of Syrian refugees started renting a home in Waterloo, Ontario, for $2,000 a month. Then, after a year, the landlord asked them for nearly $4,000 a month instead.

While there are many factors at play, including a lack of affordable housing and rental demand, Rentals.ca and Urbanation attribute the July rise to an increase in post-secondary students signing leases before the fall, unprecedented population growth levels, and a decline in homebuyers.

Sean Hildebrand, President of Urbanation, also stated in a press release, "The Canadian rental market is currently facing a perfect storm of factors driving rents to new highs. This includes peak rental activity season, an open-border policy for new residents, rapidly increasing incomes, and the worst housing affordability conditions ever."

Brokers reported that some potential buyers have stayed out of the housing market for most of the year after being spooked by a series of interest rate hikes that affected their purchasing power.

Last month, the Canadian Real Estate Association stated that the average home price reached $709,218 in June, a 6.7 percent increase from the previous year. Seasonally adjusted, it was $709,103, down 0.7 percent from the previous year.

The organization also believes that the national average home price will decline by 0.2 percent from 2022 to $702,409 this year before rising to $723,243 in 2024.

July marked a milestone as the average asking rent for purpose-built rental units and apartments exceeded $2,000 for the first time, reaching $2,008, according to the report.

One-bedroom apartments topped the list with an annual increase of 13 percent and a monthly increase of 2.5 percent, resulting in an average of $1,850.

The average rent for two-bedroom units was $2,191, while the average rent for three-bedroom units reached $2,413. At the higher end, the average rent for studios was $1,445.

When breaking down data regionally, Calgary's rental market continued to experience the fastest rent increase among major Canadian cities with a 16.1 percent year-over-year rise in apartment rents. The average rent in the city was $2,036, although growth slowed slightly from the 18.4 percent growth seen in June.

Montreal also saw a significant jump, with rent growth dropping from 11.2 percent to 5.3 percent in July, bringing the average rent in the city to $1,987.