After rents skyrocketed, London market shows signs of cooling down

After rising at one of the fastest paces in the country over the past few years, rents in London seem to be stabilizing, settling about $400 below national levels, the latest snapshot of Canada’s rental market shows.

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The average asking rent in London for a vacant one-bedroom apartment was $1,770 in May, according to the latest market report by Rentals.ca, a website used by landlords to advertise available units.

That represents a year-over-year increase of 2.3 per cent, a far cry from the 36.5 per cent annual growth London saw in November 2022 when it led all 35 markets analyzed by Rentals.ca and Urbanation, a real estate research firm.

London prices also remain below Canadian averages, with asking rents for all types of homes across the country staying around record highs of $2,188, Rentals.ca reported.

The cheaper London prices are little consolation for many people looking for a new place to live, including Sylvia Romero.

A 31-year-old single mom who described her apartment hunting process as “frustrating,” Romero said she’s been looking for a two-bedroom apartment in the city for a couple of months now.

“All the apartments that seem decent and in good shape go for about $2,200 or more, which is still above my ideal budget,” she said.

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In a rare sign of the market’s softening, however, Romero said she recently inquired about a two-bedroom unit in the Westmount area. She said she was initially quoted at $2,350. Two weeks later, however, she was contacted again by the building’s manager, saying the asking price for the unit had dropped by $100.

London rents skyrocketed in the immediate fallout of the COVID-19 pandemic, rising rapidly as work-from-home accommodations allowed thousands of people to find cheaper living arrangements while keeping their jobs in more expensive communities, especially closer to the Greater Toronto Area.

But as affordability has eroded locally, and high inflation has hit Canadians’ pockets hard, renters seem to be looking elsewhere, even outside of Ontario, for savings.

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“We’re still seeing increases of 15 or 20 per hundred year-over-year right now, but it definitely tends to be in areas where there’s much more affordable rent,” said Giacomo Ladas, a spokesperson with Rentals.ca.

Edmonton, for example, saw an annual increase in asking rents of 16.4 per cent. The difference? A two-bedroom apartment in the Alberta city goes for $1,665, about $100 cheaper than what Londoners are paying for vacant one-bedroom units.

“What that really shows is people are increasing the amount of interprovincial migration that they’re doing, where they’re leaving Ontario and British Columbia to go and search for more affordable rentals,” Ladas said.

“Accessibility is no longer the priority when we have rent prices as high.”

Ladas also said prices in London could rise more during the summer months, which he described as the “busiest leasing season” annually

“We still expect London to be an active market, especially with vacancy rates in the city being very low right now,” he said.

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