Canada’s housing agency has reported that advertised rents in some major cities are showing signs of easing due to various factors such as increased housing supply and slower immigration, but renters are still facing challenges. According to the mid-year rental market update released by Canada Mortgage and Housing Corp. (CMHC), the average asking rents for two-bedroom purpose-built apartments have decreased year-over-year in four out of seven markets.
The city of Vancouver experienced the most significant decline with a 4.9% decrease in the first quarter of 2025, followed by drops of 4.2% in Halifax, 3.7% in Toronto, and 3.5% in Calgary. Conversely, average asking rents saw an increase of 3.9% in Edmonton, 2.1% in Ottawa, and 2% in Montreal compared to the first quarter of 2024.
Landlords are facing challenges as vacant units are taking longer to lease, especially in markets like Toronto, Vancouver, and Calgary, where they are competing with well-supplied secondary rentals such as condominium units and single-family homes. To adapt to market conditions, purpose-built rental operators are offering incentives to new tenants, such as one month of free rent, moving allowances, and signing bonuses. Some landlords are considering the possibility of lowering rents in the coming years.
While rents for occupied units continue to rise, the pace of increase has slowed compared to a year ago. Higher turnover rents in several major rental markets have led to decreased tenant mobility, resulting in longer average tenancy periods and more significant rent increases when tenants do decide to move.
Toronto had the highest gap in rental prices between vacant and occupied two-bedroom units in 2024, reaching 44%, while Edmonton had the smallest gap at around five percent. CMHC predicts that vacancy rates will increase in most major cities this year due to slower population growth and sluggish job markets. The agency emphasized the importance of maintaining momentum in new rental supply to meet the needs of projected future population growth and improve affordability for existing households.
Despite some downward pressure on rent prices, CMHC noted that affordability has worsened over time as rent-to-income ratios have been steadily increasing since 2020, particularly in regions like Vancouver and Toronto. Another report released highlighted similar trends across the national rental market, with asking rents for all residential properties in Canada falling by 2.7% year-over-year in June to $2,125.
In terms of specific property types, purpose-built apartment asking rents dropped by 1.1% from a year ago to an average of $2,098, while asking rents for condos decreased by 4.9% to $2,207. Rents for houses and townhomes saw a more significant decline of 6.6% to $2,178. The rental market president noted that the largest declines have been observed in the biggest and most expensive cities, with signs of softening rents spreading across the country.
British Columbia and Alberta recorded the largest decreases in June, with asking rents falling by 3.1% year-over-year in each province. Ontario saw a 2.3% decrease, Manitoba a 1.3% decrease, and Quebec a 0.9% decrease in average asking rents. Nova Scotia experienced a marginal decrease, while Saskatchewan was the only province to record year-over-year growth in rents.
