Will Rent Increase In 2024?

*This post was created in collaboration with Alpine Credits

Homeowners aren’t the only ones feeling the pinch with soaring housing costs. Renters are also finding it increasingly difficult to afford the recent spike in rent across Canada.

But what will happen with rent prices over the coming months? Will they finally stabilize, or will they continue to climb? 

Will Rent Increase In 2024? 

Rent prices will likely increase throughout 2024. According to Rentals.ca, rent is expected to increase by roughly 5%. 

A 5% jump in rent prices may seem small, but is still significant, particularly when considering the already-high rent prices renters are currently paying. 

As of December 2023, the average asking rent price for all types of residential properties in Canada is $2,178, a record high. Adding 5% to that number would bring the 2024 year-end rent price to roughly $2,286.

What’s Affecting Rent Prices?

There are several key factors that influence rent prices and determine whether they’ll increase or decrease in the near future:

Supply 

The basic economic model of supply and demand plays an important role in rent prices. Basically, the lower the supply, the higher the demand, and vice versa. 

Right now, Canada is seeing a significant shortage in rental units. There simply aren’t enough rental properties to meet the current demand. 

This phenomenon has been happening for quite some time and is a major reason why rent is as high as it is today. 

Interest Rates

Mortgage interest rates have been on the rise over the past couple of years, making mortgages much more expensive for property owners. Landlords are offsetting this additional expense onto their tenants, who have been burdened with these rising costs.

When interest rates continue to rise, so will rent prices. On the other hand, as rates start to cool, the costs of homeownership will also level off. When this happens, landlords may be less inclined to raise rents as much as they have over the recent past. 

Inflation

Like increasing interest rates, a rise in inflation can also make property ownership and rent more expensive. Over the past couple of years, Canada has seen inflation soar. In 2022 alone, the average annual inflation rate reached a 40-year high of 6.8%. The average annual inflation rate in 2023 was considerably lower at 3.9%.  

How Much Can Your Landlord Increase Your Rent?

While landlords have been increasing rent in response to climbing housing costs, there are limitations to how and when they can increase rent prices. Rent control measures are in place for most provinces across Canada that dictate rent increase policies that landlords must follow.

British Columbia 

British Columbia has a rent control policy in place which sets limits on how much landlords can increase your rent each year. These limits are set by the Residential Tenancies Act (RTA).

Other rules landlords must follow regarding rent increases include: 

• Landlords can only increase rent every 12 months. 
• Landlords must provide tenants with at least 3 months’ notice before rent increases.

Alberta

Alberta is one of the few provinces that doesn’t have a rent control policy. Plus, there are no limits to how much landlords can increase rent. However, they must still comply with the RTA, which outlines how and when rent can be increased:

• Landlords can only increase rent every 12 months. 
• Landlords must provide tenants with at least 3 months’ notice before rent increases for month-to-month leases, and 12 weeks’ notice for week-to-week leases.

Saskatchewan 

Saskatchewan does not have a rent control policy in place. That said, landlords must comply with some rules under the RTA on how and when they can raise rent:

• Landlords must provide tenants with at least 12 months’ notice before rent increases for periodic leases and cannot increase the rent more than once a year

Manitoba

Manitoba has a rent control policy in place that dictates how much landlords can increase rent. Other rent rules landlords must oblige, include: 

• Landlords can only increase rent every 12 months. 
• Landlords must provide tenants with at least 3 months’ notice before rent increases

Ontario 

Ontario has a rent control policy in place which dictates how landlords are to handle rent increases and by how much they can increase rent. 

• Landlords can only increase rent every 12 months. 
• Landlords must provide tenants with at least 90 days’ notice before rent increases

Quebec 

Quebec has a rent control policy in place, but it is only applicable when tenants object to a rent increase within one month of being notified of it.

When tenants do not object to a proposed rent increase, landlords may increase rent by any amount. Other rules surrounding Quebec’s rent control policy include the following:

• Landlords must give proper notice of proposed rent increases
• Rent cannot be increased unless both the landlord and tenant agree that an increase is reasonable 
• Landlords or tenants can apply to the Quebec Rental Board to argue the change in rent and request that the Board determine the rent amount

New Brunswick 

New Brunswick has a rent control policy with the following rules:

• Landlords cannot increase rent to more than what is considered reasonable when considering rent charged for comparable units in the same area
• Landlords cannot increase rent less than 12 months after a tenant moves in unless the tenant and landlord come to an alternative agreement
• Landlords must provide tenants with at least 3 months’ notice before rent increases for fixed-term leases
• Landlords must provide tenants with at least 6 months’ notice before rent increases for week-to-week, month-to-month, or year-to-year leases

Nova Scotia 

Nova Scotia does not have a rent control policy in place. However, there are still limits to how much a landlord can increase rent. Landlords must also adhere to the following rules under the RTA:

• Landlords cannot increase rent less than 12 months after a tenant moves in
• Rent increases must be at least 12 months apart
• Landlords must provide tenants with at least 4 months’ notice before rent increases for month-to-month or year-to-year leases
• Landlords must provide tenants with at least 8 weeks’ notice before rent increases for week-to-week leases
• Fixed-term leases must specify the amount of rent increases and the dates when they will begin, which cannot be more often than once a year

Prince Edward Island 

PEI has a rent control policy in place with the following rules:

• Landlords can only increase rent one a year
• Rent cannot be increased automatically between tenants
• Landlords must provide tenants with at least 3 months’ notice before rent increases for month-to-month leases

Newfoundland and Labrador 

Newfoundland and Labrador does not have a rent control policy in place. There are no limits to how much landlords can increase rent. However, landlords must comply with some rules under the RTA on how and when they can increase rent:

• Landlords cannot increase rent less than 12 months after a tenant moves in
• Rent increases must be at least 12 months apart
• Landlords must provide tenants with at least 6 months’ notice before rent increases for fixed-term or month-to-month leases
• Landlords must provide tenants with at least 8 weeks’ notice before rent increases for week-to-week leases

Northwest Territories, Nunavut, And The Yukon

Northwest Territories, Nunavut, and the Yukon do not have rent control policies in place. There are no limits to how much landlords can increase rent. However, landlords are required to follow certain rules under the RTA on how and when they can increase rent:

• Landlords cannot increase rent less than 12 months after a tenant moves in
• Rent increases must be at least 12 months apart
• Landlords must provide tenants with at least 3 months’ notice before increasing rent

Why Are Landlords Increasing Rent Prices?

Landlords are raising rents not only to maintain their profit margins, but just to keep their heads above water. The increase in the cost of living is not just affecting renters and homeowners, but it’s negatively impacting investment property owners as well.   

When interest rates and property taxes increase, so does the cost of maintaining real estate. And when landlords pay more to purchase and maintain their rental properties, these costs will eventually trickle down to tenants in the form of higher rents.  

What Can Landlords Do If They Need Extra Cash?

In some cases, an increase in rent may not be enough to keep landlords afloat. When this happens, landlords may need to seek other financial resources if they can’t rely solely on higher rent prices. 

One way landlords can access extra cash is to tap into their equity. Depending on how much their property is worth relative to their outstanding mortgage balance, landlords can use home equity to cover major expenses or boost cash flow in the form of a home equity loan or home equity line of credit (HELOC).

Perhaps the easiest way to get a home equity loan or HELOC is to apply with an alternative lender like Alpine Credits, which accepts loan applications based solely on property equity. Landlords can get approved for a loan with Alpine Credits regardless of income, age, or credit score and get access to the funds required to maintain cash flow when the cost of property ownership goes up.  

Where Can Renters Get Financial Support?

Many provinces offer rent assistance to those who are struggling to keep up with their rent payments, such as the following:

British Columbia

The Rental Assistance Program (RAP) in BC provides low-income working families with a monthly benefit to help cover the cost of rent. The benefit amount ranges from $1,067 to $1,250, depending on household size and geographical location.

Alberta

Alberta’s Rent Supplement Program provides a monthly subsidy to help alleviate the cost of rent for low-income individuals and families. There are two types of rent supplement benefits under this program.

• The Temporary Rent Assistance Benefit provides short-term assistance to low-income working households who need support while they work to stabilize or improve their financial situation. 
• The Rent Assistance Benefit provides rent subsidies to low-income Albertans on a more long-term basis.

Ontario 

The Rent-Geared-to-Income (RGI) Housing subsidized housing program in Ontario was established to make rent more affordable for low-income residents. In the majority of cases, RGI rent is 30% of a household’s monthly net income.

Quebec 

Quebec’s Shelter Allowance Program is available to low-income homeowners and tenants who are having trouble managing their mortgage or rent payments. The current benefit period provides a monthly benefit ranging from $100 to $170.

Final Thoughts

It’s tough to predict with absolute certainty what will happen with rent prices in the coming months. However, rent prices will likely continue to increase, though presumably at a slower pace than what we’ve seen over the past couple of years. Even so, Canadians who are struggling with rent may qualify for rent assistance programs in their respective province.