Rental prices across Canada have been steadily declining, reaching their lowest levels in 18 months, according to a recent national rent report by Rentals.ca and Urbanation. The report highlights a 4.4% annual drop, with the average monthly asking rent in January 2025 falling to $2,100, a $96 decrease from the previous year.
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Why Are Rental Prices Dropping Across Canada?
The rental market has been experiencing a consistent decline since October 2024, marking the first annual decrease since 2021. Several key factors have contributed to this shift:
- Economic Uncertainty: Experts believe heightened downside risks in the economy are influencing landlords to lower asking rents.
- Declining Immigration Growth: A slowdown in international population growth has reduced the demand for rental properties.
- Record-High Apartment Completions: Canada is seeing a multi-decade high in new apartment developments, increasing supply and weakening rental prices.
“The downward trend for rents in Canada accelerated during the first month of 2025,” said Shaun Hildebrand, president of Urbanation. “With economic concerns, lower international population inflows, and rising apartment completions, rents are expected to soften further in the coming months.”
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Which Rental Property Types Are Seeing the Biggest Declines?
Not all rental property types are affected equally by the drop in prices. The secondary rental market has been impacted the most:
- Condo apartments: Down 6.5% in asking rents
- Houses and townhomes: Down 8.9%
- Purpose-built rental apartments: Down only 1.7%
Interestingly, studio apartments and three-bedroom units have bucked the trend, seeing small rent increases of 0.5% and 2.1%, respectively.
Which Provinces and Cities Are Experiencing the Biggest Rent Declines?
The extent of rental price drops varies significantly by province and city.
Provinces with the Largest Rent Declines:
- Ontario: Down 5.2% to an average rent of $2,329
- British Columbia: Down 2.6% but still the most expensive rental market at $2,463
- Nova Scotia: Down 0.7%
- Quebec: Down 0.4%
Provinces with Rising Rents:
In contrast, Alberta, Saskatchewan, and Manitoba saw rents increase by 2-3%, as demand remains strong in these more affordable markets.
Major Cities Rental Trends:
- Toronto: Down 7.6% to $2,615—its lowest level in 30 months
- Vancouver: Down 5.2% but still Canada’s most expensive city for renters
- Calgary: Down 6%
- Ottawa: Down 0.2%
- Montreal: Down 2.2%
- Edmonton: Up 3.3%
The report also notes that Vancouver rents have fallen by 13% since reaching their peak in July 2023, indicating a significant cooling of what was once an overheated market.
Are Rents Really More Affordable Now?
Despite recent declines, rental affordability remains a challenge. The 38-month streak of rent increases before this downturn means that rental prices are still:
- 5.2% higher than two years ago
- 16.4% higher than in 2022
What’s Next for Canada’s Rental Market?
With economic uncertainties, rising housing supply, and shifting immigration patterns, experts believe rents may continue to decline in the short term. However, long-term affordability remains a concern, especially in high-demand regions.
For renters, this could be a good time to negotiate lower rents or explore more affordable housing options as the market continues its correction.
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