Rents are declining in Canada but affordability remains the biggest concern for tenants

Ottawa —
Despite the decline in rental prices offered in Canada over many months, affordability remains the biggest concern for tenants, according to a new survey that included more than a thousand tenants in major markets across the country.

The survey showed that about 70% of participants consider rising rents the main obstacle in searching for housing, far ahead of those who pointed to the unsuitability of available units or the limited supply in the market.

The results reveal that the rental crisis is no longer only related to the scarcity of units, but to the gap between what tenants can actually pay and what the market demands. While 42% of participants said their monthly budget is less than $1,500, the average rent required in Canada remains above $2,000 per month.

This came despite the fact that the average offered rents fell in May to $2,029, a year-on-year decrease of 4.7%, marking a continuation of the downward trend after peaking at $2,202 in May 2024.

But this decline was not enough to change tenants' sense of pressure, as about half of the participants expect prices to remain at their current levels or rise over the next six months, compared to only a quarter who expect the decline to continue.

The survey indicates that many tenants do not move in search of optional improvements as much as they move under pressure of necessity. Forty percent said the main reason for searching for new housing is to find a less expensive place, while others pointed to the need for more space or moving due to work or study.

The results also showed that a wide segment of apartment seekers has become more cautious in their choices, with 36% saying they only consider units subject to rent controls, in an attempt to avoid future increases that are difficult to afford.

At the level of housing preferences, in-unit washer and dryer topped the amenities tenants are willing to pay more for, followed by central air conditioning, private outdoor spaces, and parking spots.

The survey also showed a change in the way of searching for housing, as 29% of participants said they used artificial intelligence tools, such as ChatGPT or Gemini, to help them search for an apartment or compare available options.

The results reflect a dual reality in the Canadian rental market: prices have started to decline from their peak, but their current levels are still far from the budgets of many families, making the affordability crisis continue despite the improvement in overall numbers.