London rents drop 4% in 2024, first annual decline since 2020

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Rents in London dropped for the third straight month in December, ending 2024 lower than they started the year for the first time since the COVID-19 pandemic, the latest snapshot of the local rental market shows.

The average asking rent for all types of rental properties in the city was $2,010 last month, representing a year-over-year drop of four per cent, according to Rentals.ca, a website used by landlords to advertise their units.   

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That rate of decline is higher than the 3.2 per cent recorded across Canada in December, and just below the provincial year-over-year drop of 4.7 per cent, the company reported.   

“The decline in rents last year followed growth of 8.6 per cent in 2023 and 12.1 per cent in 2022, representing the first time that rents experienced an annual decrease since the COVID-19 pandemic in 2020 when rents fell 5.4 per cent,” Rentals.ca noted in its latest market report.  

In a further sign that the local rental market softened in 2024, the average asking rent dropped in December across all types of units. The year-over-year drop among bachelor, studio and one-bedroom units was six per cent, with rents for two-bedroom and three-bedroom apartments falling by four and five per cent respectively.  

That left the asking price of a one-bedroom unit in London at $1,765, about $89 cheaper than in January 2024.  

Locally, several factors have contributed to helping control rent prices in London, which shortly before the pandemic was among the cities with the highest rent increases in Canada.  

One of them is the construction of a large number of apartment buildings in the city, which helped push London’s vacancy rate to 2.9 per cent in 2024, the second-highest rate for the region in the past 10 years.  

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The second is a softening in demand from college and university students after the federal government, facing criticism over its immigration policies, decided last year to cap the number of student visas it issued to international students. Ottawa cut permits by 35 per cent for the 2024 school year and is making a further 10 per cent reduction for 2025.  

“We kind of thought that, at least during the summer months, are going to be exploding with rent costs because . . . that’s when you get the rush of students, but in fact, rents in August and July of 2024 were cheaper than they were in August and July of 2023,” said Giacomo Ladas, of Rentals.ca.  

“Rent prices have gone down because there’s been new supply, there has been a recent slowdown in population growth and there’s also been a weakening economy. When all of that happens, prices go down.”  

But London also seems to be benefiting from a trend that is seeing people leaving cities with a higher cost of living and moving to other places in the country with more affordable rents.  

“What we’ve been seeing pretty much all of 2024 is that the provinces with the most expensive rents are the only provinces where we saw rents go down throughout the year,” Ladas said.   

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Atlantic Canada and Manitoba, for instance, saw rents rise in 2024 by five per cent, followed by Saskatchewan’s four per cent.  

Ladas anticipates a similar dynamic will play out in 2025 “where affordability is really going to be the driving factor for renters, not accessibility.  

“It’s a good sign for renters who are looking to get into the market because there might be some temporary relief,” he said of the London market.  

“But I think what’s going to happen is a levelling off in this country. The most expensive markets are going to continue to see rents go down, and areas that have a little bit more favourable rent prices, I think demand is going to be pretty high in those spots.”  

jjuha@postmedia.com

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