November marks the second month in a row in which the top five most expensive cities to rent in Canada are all based in B.C., with North Vancouver at the top of the list.
A recent study from liv.rent shows that the average rent in Greater Vancouver for an unfurnished one-bedroom apartment increased from $2,256 in October to $2,317 this November. North Vancouver rent rose by 10.4 per cent, making it the most expensive city in Canada with an average of $2,760 per month. West Vancouver is second with Vancouver in third, Richmond in fourth and Burnaby in fifth.
When compared with the rest of Canada, average rent in downtown Toronto ($2,433) is still lower than that in Richmond ($2,446) and Burnaby ($2,445) for an unfurnished, one-bedroom place.
The high rental averages can be attributed to the combination of interest rate hikes and inflation as well a low vacancy rate that is putting pressure on pricing. Renters could see prices remain high for the coming months, according to liv.rent.
In Canada, the average price for a home was $640,479 in September 2022. B.C.’s average home price was roughly 44 per cent higher than this, according to Matisse Yiu, a landlord and marketing manager with liv.rent. When you take into account the low vacancy rates in the area, B.C. is a “breeding ground” for exceptionally high rental prices, says Yiu.
Another factor is new supply which has been popping up, allowing landlords to rent out these units at higher prices, according to Yiu.
In the city of Vancouver, the average rent for an unfurnished, one-bedroom is $2,594 with Downtown, Kitsilano and Fairview as the top three most expensive neighbourhoods.
Yiu said Vancouver and North Vancouver have been battling throughout 2022 for the top spot as most expensive city for rentals.
“Speaking about North Vancouver itself, this isn't an overnight change. We’ve been tracking its prices throughout the last few years and it's really been on a steady incline for a while now,” Yiu said.
The reasons behind this incline can be attributed to a low vacancy rate and its pandemic-related attractiveness.
The District of North Vancouver saw a rental vacancy rate of 1.2 per cent in 2019, according to the 2019 CMHC Rental Market Report for Metro Vancouver. In addition, the average rent per square foot for North Vancouver ($2.49) is less than Vancouver ($3.81) and Burnaby ($3.51), despite these two cities having a lower overall rent.
“When the pandemic happened, everyone moved out of the downtown core, they were looking for bigger spaces, for average rent per square foot that was lower and they didn't need to go to the office every day,” she said
“We saw this really huge shift of renters moving out and moving to more suburban areas, therefore also increasing rent for those areas.”
As new developments are being completed in Burnaby, Yiu said this is an area to watch. The current average rent for an unfurnished, one-bedroom apartment in Burnaby is currently $2,445.
These next few months will mark the low renting seasons. While rental prices are still high and may continue on that trajectory for the coming months, renters will have more power to bargain their price, Yiu says.