Canada’s condominium market remained a significant component of the rental housing landscape in 2024, influencing supply, rent growth, and market conditions. The latest data from the CMHC Fall 2024 Rental Market Report, released in December, provides valuable insights into these developments, highlighting differences between regions and other trends in rental demand which may affect buyer, seller, and investor clients.

Condominium Rentals and Rental Market Supply

According to the report, condominiums continued to play a major role in Canada’s rental housing market, especially in urban centers such as Toronto and Vancouver. In Toronto, condominiums made up a record 41% of the rental market in 2024. This growth was driven by more investors choosing to lease their units rather than sell them, as resale conditions became less favourable. Vancouver also saw an increase in rental condos, though at a slower pace, as some investors opted to sell their units instead.

In contrast, Calgary and Edmonton experienced a reduction in the share of rental condominiums. Rising homeownership demand and favourable selling conditions in these cities encouraged more investors to sell rather than lease their units, reducing the availability of rental condos. These regional variations demonstrate how local market dynamics, including resale conditions and housing preferences, influence the supply of condominiums available for rent.

Tight Market Conditions Persist

The national vacancy rate for rental condominiums remained extremely low at 0.9% in 2024, unchanged from the previous year. This scarcity highlights ongoing challenges in meeting rental demand, despite the overall increase in purpose-built rental housing. The continued low availability of rental condominiums supports stable rental demand, particularly in cities where supply constraints remain significant.

While these conditions provide a consistent market for investor clients, they also pose challenges for tenants seeking rental options. This persistent tightness in the rental condominium market reflects broader supply pressures in Canada’s urban housing sectors.

Rent Growth and Turnover Trends

Rental prices for condominiums increased moderately in 2024, with new units seeing an average rent growth of 5.4%. Although this represents a slight slowdown compared to the 8% growth seen in 2023, turnover rents, when tenants move out and new ones move in, experienced much sharper increases. In some areas, turnover rents rose by over 20%, and in Toronto, they climbed as high as 40.7% in certain cases.

These rent increases were partly influenced by rent control policies, which often limit annual increases for existing tenants but allow significantly higher rates for new leases. While this benefits investor clients seeking higher returns on new rentals, it creates barriers for prospective renters, particularly those entering the market for the first time or relocating within the city.

Regional Trends in Rental Market Contributions

The impact of condominiums on rental markets varied significantly between regions in 2024. In Toronto, the growth in rental condominiums helped meet demand, as investor-owned units made up a larger share of available rentals. This trend reflects the role of condominiums in providing flexible rental options in high-demand urban markets.

In Vancouver, a slower increase in rental condos highlighted the balance between leasing and selling options for investor clients. On the other hand, the declining share of rental condominiums in Calgary and Edmonton points to the influence of strong homeownership demand and competitive real estate markets. These differences emphasize how regional factors shape the role of condominiums in addressing rental supply needs.

Broader Implications for the Housing Market

While condominiums are a critical part of the rental market in Canada, the broader housing landscape in 2024 was shaped by record-breaking growth in purpose-built rental housing. The 4.1% increase in purpose-built rentals marked the largest annual growth in over three decades, with cities like Montréal and Calgary leading the way. However, much of this new supply was geared toward higher-income households, limiting its impact on affordability.

Condominium rentals, which often cater to middle- or higher-income tenants, similarly contributed to the rental supply but did little to address affordability challenges. The focus on higher-priced units highlights a gap in meeting the needs of lower-income renters, which remains a key issue in Canada’s housing market.

The 2024 trends in Canada’s condominium market highlight its importance in urban rental supply and its role in shaping regional housing dynamics. The data reveals how local market conditions influence investor decisions, rental availability, and pricing trends.

Understanding these variations provides a clearer picture of how condominiums contribute to Canada’s broader rental housing landscape. These trends also highlight the ongoing challenges of addressing affordability while managing tight market conditions and regional differences.