The wait is over! View the November 2023 Rentsync National Rental Demand Report.
In this comprehensive national rental demand report, we outline significant changes in unique leads per property across Canada. The data presented here is the largest data-backed analysis of rental market demand in Canada using aggregate ILS data (over 20 rental listing sites).
The data included in the Rentsync National Rental Demand Report can be used to compare and contrast demand and lead volume for the properties you manage within a given city and will allow you to make more sound decisions on marketing and advertising.
As you observe demand and unique lead volume percentage, it's possible to measure this against your own metrics, and see whether you are in line with current industry trends, and if not, how to pivot your strategies as a result.
To present this data, Rentsync has determined three key calculations for each area of the report, they are as follows:
Demand Score: Our demand score is rated out of 10 (with 10 being the highest score a city can receive), and is calculated based on unique leads per property, per city, and compared against benchmark data.
For example: If Surrey, BC received a demand score of 10 this month, versus 8.6 last month. Therefore, Surrey experienced an increase in its demand score by 1.4 this month.
Demand Percentage (% +/-): This is determined according to the year-over-year (YOY) or month-over-month (MOM) increase or decrease in unique leads per property.
For example: The month-over-month unique leads per property in Surrey, ON went up 16% in May versus April. In May 2022, the year-over-year Demand Score in Surrey, ON went up 3.8 points based on an increase of 62% unique leads per property compared to May 2021.
Position: The position is determined by unique leads per property, with cities that have at least *20 properties or more. The position will vary depending on demand.
For example: This month, Surrey, BC moved up 1 position to the top spot on the Top 40 Canadian Cities in Demand. Year-over-year Surrey, BC continued to remain in the #1 spot since last year.
*The following report provides month-over-month rental listing data for May 2022 versus April 2022, as well as a year-over-year comparison from May 2022 versus May 2021. It also outlines the month-over-month and year-over-year trends in primary, secondary, and tertiary markets.
Month-over-month (M/M): May saw growth in rental interest with an increase in prospects by +6.4%, a decrease in available properties by -2.5%, and as a result higher per property lead volume of +9.1%. This was experienced across markets of all sizes and suggests a further tightening of market conditions and competition as the supply of properties is not able to keep pace. The greatest growth was seen in primary and tertiary markets, while secondary markets experienced minimal movement month over month.
*Back from April’s slump, Whether it was the warming weather or the ever-growing barriers to homeownership; more people are driven to rentals for their shelter needs. This creates an environment where the population of renters is likely to continue accelerating creating further strain on an already tight rental market.
Year-over-year (Y/Y): Overall, in Canada, our multifamily demand score shows an increase of +72.6% in May 2022 versus May 2021. Although overall demand figures are up; both prospects -37.4% and available properties -39.5% are down respectively. The loss in prospects is primarily due to the loss of Facebook marketplace as a source of property leads, while a reduction in property availability is simply a result of strong leasing activity and a subsequent reduction in vacancies. We are unlikely to see a resurgence in market conditions similar to those in 2021 due to the normalization of leasing conditions, and the subsequent tightening of vacancy rates. Overall, the year-over-year (May '22 vs May'21) market snapshots are as follows:
*The year-over-year analysis indicates that rental demand has maintained an upward trajectory as markets stabilize and enter the annual leasing season.
*Demand is determined by calculating unique lead volume per property by market. Due to a decrease in available properties in the rental housing market, this report will only highlight the top 40 cities in Canada based on our threshold that requires at least 20 properties to be included in our data sample.
Canadian cities experienced varying levels of change month over month, while primary markets experienced the greatest interest in regards to total renters, secondary markets maintain their hold over the top 10 list with strong demand scores.
*May, did not bring about significant changes in overall demand however the ongoing tightening of market conditions seen throughout the year continues with a growing population of prospective renters competing for an ever-shrinking supply of available units.
Demand has increased for many markets due to the more severe tightening experienced. Fewer available properties in combination with a growing number of prospects have driven up average leads per property.
*Year over year we have seen the ongoing normalization of renter traffic and inquiry volumes. Those who have left the rental market have since returned and absorbed many of the previously vacant units. We are no longer seeing more varied fluctuations in the short term instead; being replaced with lower vacancies and continued growth in prospective renters. May also sees the return of Surrey at the top of the demand list usurping New Westminster which lost its spot due to both a dwindling property count and marginally lower growth in prospects. Although secondary markets have lost the most market share over the last year, they continue to be the strongest performers with demand scores and annual growth. While many have returned to primary markets for employment purposes; secondary markets show strong staying power and with the highest demand scores in the country suggest that they may be severely impacted by property availability in the coming months.
Renters have mostly returned to their preferred major markets which put a stop to the trend of urban emigration experienced throughout the last 2 years. Typically focused on smaller one-bedroom units, many are now shifting their focus to larger 2 and 3-bedroom units. Whether due to the need for at-home workspace or simply want for more living area, the rents for these units are accelerating.
Tertiary markets remain strong attractors for younger families and will continue to be in high demand as rental rates continue to grow and price many out of major housing markets.
In order to better segment our data and analyze what is happening within specific markets across Canada, we have broken down our data into 3 key market segments:
Here we will gain a deeper perspective on demand across larger populations and any movement due to the impact of COVID-19 on the rental market.
In May, the trends of growing renter demand continued with an average increase of +6.4% across the country, while property availability dropped -2.5%. More renters continue to enter the rental market which creates further strain on the limited supply.
May also saw greater growth in tertiary markets which have recently seen a loss in renter interest. Many of these communities have a greater prevalence of home ownership. Thus some of this growth is likely due to the increase in interest rates which has slowed the purchase of homes and likely driven more households to rentals.
*Overall unique leads per property increased by +6.7% in primary markets this month.
Primary markets have been dethroned as the highest monthly earners in monthly demand. On average demand scores have not changed month over month, and although some markets have declined, this is offset by the marginal growth experienced in others namely Vancouver, Calgary, and Mississauga which saw the highest month-over-month growth. Although demand scores are relatively stable, the supply of available properties continues to shrink with an average decline of -2.9% monthly. Still, relatively early on in the leasing season we expect these trends to continue throughout the summer resulting in greater competition amongst renters.
(See the year-over-year analysis below, for more perspective on demand in primary markets.)
*Overall, year-over-year demand scores have rebounded when compared to the same time last year and have increased +89%. Although up year over year it is down 52% from previous months year over year calculation; due in part to the increase in leasing volume last May, as in-person leasing reopened. In addition, a return to the tight leasing conditions seen pre-covid has enabled ongoing strong year-over-year growth in primary markets.
The strong ongoing rental demand has driven down property availability which in turn created more competition within available units which in turn has allowed for strong year-over-year rent growth.
*Secondary markets saw a decrease of -4% in demand scores, while also experiencing a +4.8% increase in prospects per property.
Although secondary communities represent many of the highest demand scores currently achieved, this is not being experienced evenly. Many markets within Ontario saw a contraction in prospect volume which negatively impacted their demand scores.
Rental rates have stagnated in many markets, and although do not show signs of significant loss, they also show limited growth even in those markets at the top of our demand rankings. Two-bedroom units have shown some resilience to this and continue to grow more substantially in many markets. Likely due to the preference amongst many for larger two-bedroom units suggesting we are likely to continue seeing strong rent growth within larger multi-bed units.
Although there remains a clear preference amongst many to move back to primary markets these communities will continue to offer compelling housing options with larger unit sizes, more open layouts, and a greater supply of multi-bedroom units all of which are factors that are becoming increasingly more important to many when making housing decisions.
*Overall, year-over-year demand scores are up +75%, while prospects per property are up 5.1% in secondary markets. The significant increase in demand scores is due primarily to the lower overall average leads per property being achieved which have resulted in overall demand scores increasing. This does not however mean that specific renter demand is up as the total number of prospects has declined directly in line with the number of properties year-over-year.
Regardless all secondary markets saw a surge in rental rates year-over-year attributed primarily to a return to work and tighter market conditions with vacancies which more closely reflect pre-covid market conditions.
*Demand scores are relatively stable and have only increased by +1%, prospects have increased by +8.5%, while available property counts are down by -2%. This has increased average prospects per property by +10.7%. Unfortunately, these strong monthly gains were outdone by secondary markets which resulted in depressed demand scores amongst tertiary markets.
Tertiary markets have in recent months experienced a downward trend in unique prospects, however, May saw a shift in this trend with Tertiary markets seeing the highest relative month-over-month growth. As previously mentioned, many of these markets have a greater focus on home ownership, which has been impacted by a combination of inflationary pressures and growing interest rates. As many become priced out of the housing market, they may be turning to rental housing as they are still able to find more affordable rentals and accommodations to fit their lifestyles. Additionally, tertiary markets have seen a shift towards younger demographics and downsizers more inclined to choose rentals over purchasing real estate.
If this trend continues then it is likely that these communities will begin displaying greater variability in rental rates with a growing population of renters competing for a shrinking supply of units.
(See the year-over-year analysis below, for more perspective on the rise in demand in tertiary markets.)
*Overall, year-over-year demand scores are up in tertiary markets, increasing by just +25% in May 2022 versus May 2021. This is down -34% from the previous month's year-over-year growth figure suggesting a severe slowdown in the explosive growth seen over the previous 12 months. Prospects per property are also down by -24.9% year-over-year, while unique prospects are down by -45.8%. Prospects have declined at approximately twice the rate of properties which has resulted in a severe reduction in average lead volume per property.
Much of the growth experienced throughout the pandemic attributed to the relocation of many households has receded indicating that some of the appeal which had initially attracted households was not able to hold renters long term. Although month-over-month renters continue to grow the long-standing trends within these communities have come to an end with many preferring larger and better-amenitized markets when making housing decisions.
An increasingly complex housing market in combination with a seriously undersupplied rental market creates conditions for what will likely be the most competitive leasing season in recent memory. Although demand has varied over the last 3 months, the general trends amongst prospective renters paint the picture of a rental market under strain.
Instead of additional inventory becoming available we have a reduction of new units entering the market due to many of the construction delays experienced throughout the last 2 years. This in combination with an ever-increasing number of households turning away from home ownership creates a scenario where we are likely to see a continued tightening of vacancy rates from what is already an all-time low.
The current preference for larger multi-bedroom units will likely become more prevalent as more households are pushed out of home ownership due to increasing interest rates and the already high requirements for mortgage approval. Many of these households would have otherwise lived in larger single-family homes but are left to compete for a smaller supply of family-oriented rental properties.
May 2022 marks what is likely the start of more serious tightening in market conditions, caused by less affordable homeownership opportunities in major markets. This will likely persist as inflation increases, and house prices grow at a rate 41.9% faster than incomes since 2015. Therefore, this leasing season will be the busiest and most competitive in recent years, and multifamily marketers should ensure that their properties are well positioned so as not to miss out on the growing competition for high-quality apartment homes, which may incur the longest renter tenure seen in recent history.
Gérer les paramètres des témoins
Rentsync recueille des données de témoins pour vous offrir une meilleure expérience d’utilisateur, mais nous vous offrons aussi des choix concernant la manière par laquelle nous et nos partenaires tiers recueillons et utilisons les données obtenues par les témoins.
Ceux-ci sont impératifs pour vous permettre de naviguer le site Web et d’utiliser ses fonctionnalités. Si vous n’autorisez pas ces témoins, vous ne pourrez pas correctement utiliser notre site.
Témoins publicitaires et témoins traceurs
Ceux-ci enregistrent votre visite sur le site Web de Rentsync, les pages individuelles que vous visitez, les liens que vous suivez et le type d’appareil que vous utilisez. Notre utilisation de ces témoins pourrait faire en sorte que vous voyiez des annonces de Rentsync sur d’autres sites Web. Nos partenaires pourraient également utiliser de l’information captée par ces témoins à des fins d’évaluation de leurs propres annonces numériques. Si vous n’autorisez pas ces témoins, il se peut que vous voyiez du contenu et des publicités auxquels vous n’êtes pas intéressé.
Nous utilisons des témoins de partenaires publicitaires tiers pour vous offrir des publicités pertinentes sur le site Web Rentsync et sur d’autres sites Web. Pour refuser l’utilisation de témoins et de publicités ciblées par un tiers, vous devez vous rendre sur leur site Web et suivre les procédures de refus qui y sont spécifiées.