Slight decline in London average asking rents in October

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The average asking rent for London apartments declined slightly in October, a new market snapshot shows, with rents for one-bedroom units dropping by four per cent from the same month in 2023. The local numbers come as the average rental price nationwide posted its first year-over-year decline since July 2021. Our Jennifer Bieman reports.

London rents vs. national averages

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The average rent asking price for a one-bedroom apartment in London was $1,797 in October, with rents for two-bedroom units averaging about $2,190, the latest market report from Rentals.ca shows. The totals are not far off September’s averages of $1,804 and $2,226 respectively. 

London’s average rental asking prices were slightly below the national averages of $1,866 for a one-bedroom and $2,287 for a two-bedroom unit in October.  

“In the short term, because winter is a slower season in the market, I wouldn’t expect any crazy increases,” said Giacomo Ladas, of Rentals.ca 

“I’d bet it will stay relatively the same as it is now, maybe continuing to decrease a little bit.”  

London’s October totals represent a 4.3 per cent decrease in average asking rents for one-bedroom units and a three per cent decrease in average asking rents for two-bedroom units from the same month in 2023.  

Windsor is the least-expensive market in Ontario, the latest Rentals.ca report shows. Asking rents for a two-bedroom unit there, $1,786 in October, were less than the average for a one-bedroom unit in London.  

The average asking price for a one-bedroom rental unit in Windsor was $1,549 in October.  

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Why rents are softening in Canada

Nationwide, asking rents for all residential property types averaged $2,152 in October, a 1.2 per cent decrease from the same month in 2023. The latest total is the first year-over-year decline in rents since July 2021, during the pandemic, the report said. 

Asking rents in Vancouver and Toronto have been declining for a while, Ladas said. This trend is now spilling over into secondary markets, such as London.  

The focus on building new rental unit supply, a slowdown in population growth and immigration and the trend of adults working from home opting out of units in expensive cities are all factors in the stabilization and decline in average asking rents, Ladas said.  

“With all of these together, you see a little bit of softening in rents,” he said.  

London has had a declining rental vacancy rate for several years and strong demand in the market, a situation that put upward pressure on rental prices, said Steve Pomeroy, a consultant and professor at McMaster University’s Canadian housing evidence collaborative.  

Federal government moves to address immigration – including international students – and London’s push to build new rental supply is having an impact, he said.  

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“You are flooding the market in London with new supply, and that’s a good thing. It’s helping to moderate those rent increases,” Pomeroy said. 

Move-in bonuses now a thing

Rentals.ca is seeing more landlords offering move-in bonuses, perks that disappeared when the rental market was red-hot, Ladas said.  

“That just wasn’t a thing for a long time, because there was such high demand. Now, we’re starting to see a lot of move-in incentives, like a month of free rent or free cable,” Ladas said.  

Further reductions in the Bank of Canada interest rate are likely to make new builds more attractive to start and entice renters waiting to pull the trigger on a new home, making the rental they previously occupied available for someone else, Ladas said. 

Pomeroy is expecting London’s housing market to remain stable in the next little while.  

“We’re still going to get population growth, but not to the same degree we had before, and that, coupled with strong new supply, is really going to help London continue to drive our rental rates a little bit lower,” he said.  

jbieman@postmedia.com

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