Canada’s housing agency has reported that rents in certain major cities are showing signs of easing due to factors like increased supply and slower immigration, though renters are still facing challenges. According to the Canada Mortgage and Housing Corp.’s mid-year rental market update released on Tuesday, the average advertised rents for two-bedroom purpose-built apartments decreased year-over-year in four of the seven markets analyzed.
Leading the decline was Vancouver, with a 4.9 percent drop in the first quarter of 2025, followed by decreases of 4.2 percent in Halifax, 3.7 percent in Toronto, and 3.5 percent in Calgary. Contrarily, average asking rents saw an increase of 3.9 percent in Edmonton, 2.1 percent in Ottawa, and 2 percent in Montreal compared to the first quarter of 2024.
The report highlighted that landlords are finding it challenging to lease vacant units, particularly in Toronto, Vancouver, and Calgary, where new purpose-built rental units are facing competition from well-supplied secondary rentals like condominiums and single-family homes. Consequently, landlords have begun offering incentives such as one month of free rent, moving allowances, and signing bonuses to attract new tenants, with some also considering potential rent reductions in the coming years.
While rents for occupied units continue to rise, the pace has slowed compared to the previous year. The report noted that higher turnover rents in several major rental markets have led to decreased tenant mobility, resulting in longer average tenancy periods and more significant rent hikes when tenants do decide to move.
In 2024, the disparity in rental prices between vacant and occupied two-bedroom units was most pronounced in Toronto at 44 percent, while Edmonton had the smallest gap at approximately five percent. The report predicts that vacancy rates will increase in most major cities this year due to slower population growth and a sluggish job market, particularly in Ontario, where reduced international migration targets may impact demand.
Despite the downward pressure on rent prices, CMHC emphasized that affordability has worsened over time as rent-to-income ratios have steadily increased since 2020, especially in regions like Vancouver and Toronto. Another report released recently highlighted similar trends across the national rental market, with asking rents for all residential properties in Canada dropping by 2.7 percent year-over-year in June to $2,125.
Moreover, the report indicated that rents for purpose-built apartments fell by 1.1 percent from a year ago to an average of $2,098, while condo rents decreased by 4.9 percent to $2,207. Rents within houses and townhomes saw a larger decline of 6.6 percent to $2,178. Urbanation president Shaun Hildebrand noted that while rent decreases have been modest at the national level, larger declines have been observed in the most expensive cities, signaling a broader softening in rent prices across the country.
In June, British Columbia and Alberta experienced the most substantial decreases, with asking rents dropping by 3.1 percent year-over-year in both provinces to an average of $2,472 in B.C. and $1,741 in Alberta. Ontario followed with a 2.3 percent decrease to $2,329, Manitoba with a 1.3 percent decrease to $1,625, and Quebec with a 0.9 percent decrease to $1,960. Nova Scotia’s average asking rent slightly decreased to $2,268, while Saskatchewan was the only province to record year-over-year growth, increasing by 4.2 percent to an average of $1,396.