For London renters, 2025 arrives with reasons for optimism

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London took a step in the right direction in 2024 amid an ongoing housing affordability crisis, adding thousands of rental units to the market that helped lift the city’s vacancy rate to 2.9 per cent, one of the highest levels in the past decade. That’s a positive sign, but the market remains tight, with rents unaffordable for many. Reporter Jonathan Juha offers tips for those searching for a new place in 2025

What to expect in terms of prices

After years of rapid, double-digit increases, rents in London stabilized for the most part in 2024. They remain elevated, especially compared to five or 10 years ago. But there also are signs, besides the higher vacancy rate, that there’s been a slight softening in the market.  

According to Rentals.ca, a website used by landlords to advertise their units, the average asking rate for a one-bedroom unit in November was $1,782. That’s 4.8 per cent cheaper than the same month in 2023. Two-bedroom apartments have seen a similar depreciation, with prices dropping on a year-over-year basis by 4.4 per cent and now sitting at $2,181.    

The Canadian Mortgage and Housing Corporation is projecting 2025 could shape up to be a similar year to the one just ending, with more new rental stock entering the market and softer demand from international students leading to a slower pace of rental price growth.  

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What about availability?

Though London’s vacancy rate improved this year, the location and the types of units becoming available wasn’t spread evenly.   

Vacancy rates for units renting below $1,200, for instance, were significantly lower than among newer, higher-end apartments. The vacancy rate for units renting below $1,200 was only 0.6 per cent. That number jumps to 3.8 per cent for apartments renting above that price. So those needing an apartment as soon as possible should expect fierce competition  at the affordable end of the market.    

If your budget allows it, however, certain areas in the city saw bigger jumps in vacancy rates, meaning there are more available units. Key among them are areas near Western University and Fanshawe College, where demand from international students dropped, according to the CMHC, after the federal government implemented new caps on student visas.   

Vacancy rates were also particularly high for one-bedroom apartments in south London (3.8 per cent), an area that includes neighbourhoods such as Westmount, White Oaks and Westminster; and just south of downtown, including Wortley Village (3.1 per cent).    

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For two-bedroom units, besides the school areas, vacancy rates were higher south of downtown and in north London, with vacancy rates at 3.4 per cent and 3.9 per cent respectively.

Are there options outside the city?

If your job allows it or commuting isn’t an issue, some neighbouring communities also have been increasing their rental stock, with some units, even newer ones, renting a couple of hundred bucks cheaper than in London.  

St. Thomas is one alternative, with vacancy rates for two-bedroom units going to 4.8 per cent in 2024 from 2.7 per cent in 2023. Lucan also has seen its fair share of new rental projects being built, with more planned.

Affordability improves as renters get farther away from the Greater Toronto Area. According to Rentals.ca, for example, the average asking rent for all types of properties in London last month was $2,039; that is lower than Kitchener ($2,082), Waterloo ($2,239) and Mississauga ($2,568); to the west of London, in Windsor, one-bedroom apartments are going for $1,545 on average while two-bedroom apartments rent for about $1,841.

jjuha@postmedia.com

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