As home prices retreat, rent prices continue their upward climb, posting another 3.7% monthly increase.

The average rent for all property types is now $1,888 per month, according to data from Rentals.ca. That’s up 10.5% year-over-year and on its way to the pre-pandemic record high of $1,953 recorded in September 2019.

Average rents are now nearly 13% above the low of $1,676 recorded last April in the midst of the pandemic.

A regional breakdown

Vancouver remains the highest-priced rental market in the country, with an average rent among all property types of $2,909 per month. For a two-bedroom rental, the monthly cost there is now $3,495, up 24.1% year-over-year.

Not far behind is Toronto, with an average monthly rent of $2,365, or $3,002 for a two-bedroom unit. That’s up 21.5% from last year. Toronto also had the smallest average unit size at just 727 square feet, Rentals.ca data showed.

Lower down the list is Ottawa, with an average rent of $1,902, followed by Montreal at $1,729 and Calgary at $1,504.

Rising demand from would-be buyers

Rising interest rates are dissuading a number of prospective homebuyers from pulling the trigger on a home purchase right now, choosing instead to remain in the rental market, said Ben Myers, president of Bullpen Research & Consulting.

“The typical seasonal increase in demand in the spring, coupled with renewed interest in more expensive downtown properties in Vancouver and Toronto, also contributed to the rise in rents nationally,” he added.

In Toronto, the least-to-list ratio, an important measure of supply and demand, in the condo rental market hit its highest level since at least 2015, noted real estate analyst Ben Rabidoux of Edge Realty Analytics.

“If the resale market cools, demand by necessity shifts into rentals,” he wrote. “Throw in strong population growth, and we end up with a dramatic strengthening in the rental market in major metros.”