The first quarter of 2024 demonstrated strong performance across Canada’s multifamily market, with significant growth observed particularly in Saskatchewan. Across the country, the average national in-place rent reached a record high of $1,503, representing a 1.5% increase from the previous quarter and 6.5% year-over-year growth.

Across Canadian Metropolitan Areas (CMAs), Saskatoon, marked second highest year-over-year increase for in-place rents during the first quarter, with an impressive 9% growth, right behind Calgary which had a growth of 13.7%. This notable 9% YoY growth in Saskatoon is primarily driven by a confluence of factors, including a limited housing supply and the region’s relative affordability compared to other CMAs.  

Despite a 41% annual turnover and a 3.2% vacancy rate as of Q1 2023, the market remains vibrant. People are initially drawn to Saskatoon due to its lower costs — average rent in Q1/2024 was $1,379, significantly below the national average of $1,500 — but tend not to stay long, reflecting ongoing challenges with affordability.

Overview of market dynamics 

As we entered 2024, Canada’s multifamily rental market demonstrated strong growth across the country, despite prevailing economic challenges. The CMAs with the highest year-over-year increases in in-place rents during the first quarter were Calgary at 13.7%, Saskatoon at 9% and Edmonton at 8.5%. In contrast, the areas with the lowest growth included Winnipeg at 4.1%, and both Vancouver and Montreal at 5%. This disparity highlights the varying regional dynamics within the national housing market, where market pressures and economic factors continue to influence rental trends significantly.

Canada faces a serious call for housing amidst a national shortage, with rent growth remaining high due to demand outstripping new supply. The economic growth is weak, and the employment market is struggling, further complicating the housing situation. As reported by CMHC, total housing starts fell by 7% in 2023 with 223K units recorded compared to the previous year’s 240K. The same year Canada took in 1 million new permanent residents.

Despite economic challenges across Canada, such as high interest rates affecting consumer spending and housing affordability, Saskatchewan’s economy has demonstrated resilience. The province’s standout performance includes a notable increase in lease-over-lease rents by 9.2%, suggesting vigorous demand continues. However, the vacancy rate in Saskatchewan edged up slightly to 3.2%, and the high turnover rate highlights the impact of rising rents on tenant mobility.

In a comparative analysis, Alberta shows a parallel trend with a 10.7% growth in in-place rents and an uptick in vacancy rates. Ontario, particularly Toronto, continues to see robust new lease rate growth driven by its popularity among immigrants. In contrast, regions like Montreal and Vancouver are experiencing the lowest growth rates, where affordability challenges persist for new leases.

Overall, the multifamily market in Canada, especially in Saskatchewan, maintains a favourable outlook. The need for more housing is evident as rapid population growth continues, and slow construction efforts are not keeping pace. The anticipated policy rate cuts by the Bank of Canada could provide some relief, potentially enhancing consumer spending and energizing the housing market.

Strategic responses and future outlook 

National strategies to address housing shortages include converting unused commercial spaces into residential units. With projects already underway in Calgary and Halifax, this approach could significantly demonstrate its benefits to provinces like Saskatchewan. The renewal rates in Saskatchewan suggest tenants are increasingly likely to renew their leases, motivated by the high costs associated with relocating in a tight market. Notably, the lease-over-lease rent growth for existing leases stands at 8.3%. However, for new leases nationally, the lease-over-lease rent growth is higher, recorded at 10.5%. Given these figures, the outlook remains cautiously optimistic, reflecting the dynamic and varied conditions across the rental market.

In spite of high interest rates, housing affordability issues and economic challenges in greater Canada, Saskatchewan’s economy has shown resilience, boasting a lower unemployment rate of 4.7% compared to the national average of 6.1%. This economic standing bolsters a strong rental market, contrasting with other regions where economic strain has led to job losses.

Ongoing adjustments in monetary policy, anticipated to ease the interest rates from their current highs, may help alleviate consumer burdens and stimulate further growth in the housing market, offering some relief in the coming periods. 

Harnessing Yardi data for strategic investment decisions 

In today’s fluctuating economic environment, making informed decisions is more crucial than ever. Yardi’s detailed multifamily reports provide essential insights that empower you to navigate the real estate market with confidence. Our Q1 2024 market analysis draws from a comprehensive database of over 470,000 units and 5,300 properties across Canada, providing an in-depth look at in-place rents, lease-over-lease rent growth, vacancy rates and annual turnover percentages by province, CMA and bedroom type.

To keep informed of the evolving trends in Saskatchewan, Western Canada or across the nation, subscribe to Yardi’s multifamily quarterly reports.