By Sammy Hudes
In its mid-year rental market update released Tuesday, Canada Mortgage and Housing Corp. said average asking rents for a two-bedroom purpose-built apartment were down year-over-year in four of seven markets.
Vancouver led the way 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. Average asking rents grew 3.9% in Edmonton, 2.1% in Ottawa and two per cent in Montreal, compared with the first quarter of 2024.
Landlords reported that vacant units are taking longer to lease, CMHC said, especially for new purpose-built rental units in Toronto, Vancouver and Calgary, where they face competition from well-supplied secondary rentals such as condominium units and single-family homes.
“Purpose-built rental operators are responding to market conditions by offering incentives to new tenants such as one month of free rent, moving allowances and signing bonuses,” the report said, adding some landlords anticipate they may need to lower rents over the next couple of years.
The agency said rents for occupied units are continuing to rise but at a slower pace than a year ago. It said higher turnover rents in several major rental markets have decreased tenant mobility, leading to longer average tenancy periods and “more substantial” rent increases when tenants do move.
In 2024, the gap in rental prices between vacant and occupied two-bedroom units reached 44% in Toronto, the highest among major cities, while Edmonton had the smallest gap at roughly five per cent.
Vacancy rates are expected to rise in most major cities this year amid slower population growth and sluggish job markets, CMHC said.
“As demand struggles to keep pace with new supply, the market will remain in a period of adjustment. This is particularly true in Ontario due to lowered international migration targets, especially in areas near post-secondary institutions,” the report stated.
“While the market may have abundant supply in the short-term, there is still a need to maintain momentum in new rental supply to meet the needs of projected future population growth and to achieve better affordability outcomes for existing households.”
Despite downward pressure on rent prices, CMHC said affordability has still worsened over time as rent-to-income ratios have steadily risen since 2020, especially in regions like Vancouver and Toronto where turnover rents are driving increases.
A separate report released Tuesday outlined similar trends across the national rental market last month.
The latest monthly report from Rentals.ca and Urbanation said asking rents for all residential properties in Canada fell 2.7% year-over-year in June to $2,125, marking the ninth consecutive month of annual rent decreases.
Despite the drop, average asking rents remained 11.9% above levels from three years ago and 4.1% higher than two years ago, “underscoring the long-term inflationary pressure in the rental market,” the report said.
Purpose-built apartment asking rents fell 1.1% from a year ago to an average of $2,098, while asking rents for condos dropped 4.9% to $2,207. Rents within houses and town homes fell 6.6% to $2,178.
“Rent decreases at the national level have been mild so far, with the biggest declines mainly seen in the largest and most expensive cities,” Urbanation president Shaun Hildebrand said in a news release.
“However, it appears that the softening in rents has begun to spread throughout most parts of the country.”
B.C. and Alberta recorded the largest decreases in June, with asking rents falling 3.1% year-over-year in each province to an average of $2,472 in B.C. and $1,741 in Alberta.
That was followed by Ontario’s 2.3% decrease to $2,329, Manitoba’s 1.3% decrease to $1,625 and Quebec’s 0.9% decrease to $1,960. Nova Scotia’s average asking rent ticked 0.1% lower to $2,268, while Saskatchewan was the only province to record year-over-year growth, at 4.2%, to an average of $1,396.
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Last modified: July 8, 2025