Rents keep sliding as supply finally catches up

Average asking rents in Canada fell to a 33‑month low in February, extending a record run of declines that reshaped the country’s rental landscape.

The latest National Rent Report from Rentals.ca and Urbanation showed average asking rents across all property types at $2,030, down 2.8% year over year and 1.3% from January.

National rents were 7.4% below levels two years earlier, although still 2.3% higher than three years ago. Purpose‑built rentals averaged $2,030, down 1.9% annually, while condo rents fell 5.1% to $2,082.

Urbanation president Shaun Hildebrand said Canada is experiencing “its largest downturn in rents in recent history,” with long‑awaited new supply landing just as demand cooled.

“The supply that everyone has been waiting so long for has arrived at a time when demand has slowed, creating a rare opportunity for renters to take advantage of better affordability,” Hildebrand said.

Affordability pressures eased enough that the typical household paid 29% of income on rent in February, slipping below the industry’s 30% benchmark for the first time in more than six years, according to the report.

Regional shifts and a changing risk picture

The downturn was most pronounced in provinces that led the earlier run‑up. Average apartment rents dropped 4.4% in Alberta, 4.3% in Ontario and 4.2% in British Columbia, while Quebec posted a smaller annual decline.

Saskatchewan was a notable outlier, with average rents rising 3.3%.

For brokers and lenders, the rent slide intersected with a broader softening in the rental market. A 2025 Yardi Canada multifamily study revealed that national vacancy rates reached 3.6% in Q4 2024 – the highest since 2020 – alongside a 28.2% year‑over‑year jump in apartment completions.

“These trends suggest some easing of the intense competition we’ve seen in recent years, but affordability challenges remain at the forefront,” Yardi Canada vice president and general manager Peter Altobelli said.

Those dynamics echo Canada Mortgage and Housing Corporation (CMHC) data showing that rent growth cooled as new units were delivered and vacancies in major centres edged higher, even as the national housing agency warned that structural supply gaps remained sizeable.

Market participants are now weighing how far rent softness could go before undermining returns for highly leveraged investors and build‑to‑rent projects – particularly in cities where mortgage arrears risk has already been flagged as a concern.

What the rent reset meant for mortgage professionals

For experienced mortgage brokers, the shift in rents cut both ways. Cheaper asking rents reduce near‑term pressure on would‑be first‑time buyers to exit the rental market at any cost, potentially lengthening the runway before purchase.

At the same time, more balanced rental conditions and slightly lower shelter‑cost ratios could improve debt‑service profiles for some investor and owner‑occupier clients, especially in markets where rents have been consuming well over a third of household income.

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