The last time Canada's rental vacancy rate was this low, George Michael and Rick Astley were at the top of the charts.

It's kind of fitting, in a way, because asking prices for rents have made us feel like we're getting trolled, or more suitably, Rickrolled.

According to Canada Mortgage and Housing Corporation's (CMHC) most recent report, strong rental demand outpaced supply for the second year in a row in most of the country's major markets.

That resulted in less available purpose-built rental apartments and lower affordability in Canada's primary rental market.

"In 2023, strong rental demand continued to outpace supply in communities across the country, making it very difficult for renters to find housing they can afford," Kevin Hughes, CMHC's deputy chief economist, said in a statement.

"The vacancy rates and rent increases we are observing are further evidence the current level of rental supply in Canada is vastly insufficient and the need to increase this supply is urgent."

The national vacancy rate for purpose-built rental apartments in the primary rental market is at 1.5 per cent, according to the report, representing the lowest level since CMHC began recording a national vacancy rate in 1988.

Average national rent growth for a two-bedroom purpose-built apartment grew sharply to 8 per cent from 5.6 per cent over the previous 12-month period.

This new high is above the average from 1990 to 2022 of 2.8 per cent and outpaced both inflation at 4.7 per cent and wage growth at 5 per cent.

Calgary and Toronto tied at the bottom

Calgary tied Toronto in 2023 for the second-lowest vacancy rate out of the six largest Canadian cities markets.

Alberta's largest city was particularly affected by high levels of interprovincial migration as well as significant international migration.

Montréal's vacancy rate dropped to a low not seen since before the pandemic, CMHC said, while Calgary and Edmonton both have their lowest vacancy rates in a decade.

In 2023, vacancy rates held steady in Vancouver and Ottawa, but these markets remain very tight.

"Vancouver remains Canada's tightest major rental market with the highest monthly average rents," the report reads.

No relief in 2024

This year doesn't look like it's getting better for much for the country.

Several predictions have estimated that rent will continue to increase throughout 2024 for a lot of the country, with policies in BC coming into effect, continued migration, and a strong labour market influencing demand in Alberta.

In a report of its own, rental platform rentals.ca and Urbanation predicted a similar outcome, saying that rental demand is expected to remain strong while experiencing some moderation compared to 2023.

It's due to a slowing economy, a reduced number of non-permanent residents, and an improvement in homebuying activity as interest rates begin to decline, the report said.

"The rental market in Canada will remain undersupplied but should become somewhat more balanced this year."