Despite a slight slowdown in the pace of increase, rental prices in Canada are on the rise, with the average new tenant facing a monthly payment of $2,117, according to a report by Rentals.ca and real estate consulting firm Urbanation.

The $2,117 figure marks a 9.6% increase from the average rent in August of the previous year. Although slightly lower than the all-time high of 12% recorded from August 2021 to August 2022, this remains the highest figure in dollar terms.

The ongoing housing market tumult, driven by the Bank of Canada’s efforts to curb inflation causing mortgage rates to surge, has significantly impacted the rental market. Construction activity for purpose-built rentals has increased in response to the high demand and a growing number of newcomers seeking housing, but supply is struggling to keep up with rising rents.

The report indicates that despite a record number of rental apartment completions in the past year, rent growth has remained exceptionally strong. Since May, the average asking price for a new rental has surged by $103 per month.

Renters like Cassandra Kranjec in Toronto are feeling the strain. Kranjec faced a 14% increase in her rent earlier this year, emphasizing the struggle of affording housing even while working two jobs. The rent increases are not only affecting major cities like Toronto and Vancouver but also rapidly spreading across the rest of the country.

In Ontario, average asking rents hit $2,496 last month, closely trailing Toronto’s average of $2,898. Rent prices in the rest of the province are increasing at a faster pace than in Toronto. British Columbia experienced a 10.8% increase in average rent over the past year, with Vancouver seeing a 7.3% increase in the average asking price for a rental apartment.

In Alberta, average rental asking prices increased by a staggering 15.6% to $1,634, with tenants in Calgary experiencing a 17.3% increase to $2,068. Rent increases were slowest in Manitoba and Saskatchewan, with annual growth rates of 8.3% and 2.7%, respectively.

Even Quebec, once known for affordable rentals, is witnessing a surge. The province saw a 14.2% increase in average rent, reaching $1,932 in August. In Montreal, rent increased by 16.4% over the past year, pushing the average rent to over $2,000 per month for the first time.

According to Steve Pomeroy, a professor at McMaster University’s Canadian Housing Evidence Collaborative, solving the housing crisis will require a significant increase in housing supply, a solution that takes time to materialize. While Canada’s population growth and international student influx may benefit the economy in the long run, they are exacerbating the current housing shortage.

In the short term, Pomeroy advises tenants to carefully consider their alternatives before moving in response to a rent hike, as the housing shortage is a challenge that cannot be solved overnight.

Rental prices continue to soar in Canada, impacting tenants across the country, and long-term solutions like increased housing supply are crucial to alleviate the housing crisis.