The average rent requested in Canada reached a record level of $2,078 in July, according to the latest rental report from Rentals.ca and Urbanation research firm. This is the first time that the average rents for purpose-built apartments and residential units have risen above $2,000.

The monthly report compared rents for apartments, residential units, and homes in medium and large housing markets across the country, finding that rents increased by 8.9 percent year-over-year in July. This is the fastest growth rate in the past three months.

In fact, rents in July were 21 percent higher than they were during the same period two years ago, having risen by $354 per month compared to July 2021.

Rents increased by an average of 1.8% from June to July, representing the fastest month-over-month growth in the past eight months. Real estate analyst David Izikoff attributes part of this increase to seasonal demand for housing.

The report also noted record population growth and rising homeownership costs—exacerbated by increasing interest rates—as factors contributing to rising rents.

Since the Bank of Canada began a series of aggressive increases in the benchmark lending rate in March 2022, mortgage interest costs have also risen, by as much as 30.6 percent as of July. In its tenth rate hike since March, the central bank raised the benchmark rate by 25 basis points on July 12, marking the first time since early 2001 that the figure reached 5 percent.

Among purpose-built apartments and residential units, one-bedroom apartments saw the highest growth in July, with rents increasing by 13 percent year-over-year and 2.5 percent month-over-month. Nationwide, the average rent for one-bedroom units was $1,850, compared to $2,191 for two-bedroom units and $2,413 for three-bedroom units. The least expensive units across Canada were studios, with average rents around $1,445.

The cities with the five highest rents as of August—excluding smaller cities—were Vancouver; Toronto; Burnaby, British Columbia; Mississauga, Ontario; and Richmond Hill, Ontario. The average rents for one-bedroom and three-bedroom apartments in Vancouver were $3,013 and $3,918, respectively. In Toronto, these figures were $2,592 and $3,370, respectively.

Highest at the provincial level:

At the provincial level, rents increased the most year-over-year in Alberta, where the average requested rent in July was $1,578—a 15.6 percent increase compared to last July.

Quebec recorded the second highest annual rent growth in Canada at 13.7 percent. The average requested rent in that province was $1,920 in July.

Since housing is one of the largest recurring expenses for Canadians, many choose to live with roommates as the cost of living rises. According to a poll conducted by the Maru Public Opinion Foundation for TD in December 2022, 23 percent of Canadians live with a roommate or a family member who is not a spouse or child. Among these respondents, 79% said they would find it "very difficult" or "somewhat difficult" to live alone.