Key Takeaways
- Average asking rents in Canada fell 2.3% year-over-year in December to $2,060, marking a full calendar year of declines.
- Rents have declined for 15 consecutive months, with a 3.1% annual drop in 2025, exceeding the decline during the COVID-19 pandemic.
- Rents remain 14.1% higher than pre-pandemic levels in December 2019, despite being 5.4% lower than two years ago.
- Rent declines have been led by secondary market units, with average asks for house and townhouse rentals down 5% and condominium apartments down 4% year-over-year.
Introduction to the Canadian Rental Market
The Canadian rental market has experienced a significant shift in recent months, with average asking rents falling 2.3% year-over-year in December to $2,060. This marks a full calendar year of declines, with December 2025 being the 15th consecutive month that average asking rents across the Rentals.ca listings network moved lower. According to the latest report from Rentals.ca and Urbanation, the demand and supply factors that were driving rents higher between 2022 and 2024 have reversed, leading to a decline in rents. Urbanation president Shaun Hildebrand notes that a combination of record-high apartment completions, slowing population growth, economic uncertainty, and affordability challenges has worked together to push down rents.
Factors Contributing to Rent Declines
The report highlights that rent declines have been led by secondary market units, with average asks for house and townhouse rentals down 5% to $2,071 in December, while asking rents for condominium apartments fell 4% year-over-year to $2,131. Asking rents for purpose-built apartments moved 1% lower year-over-year to an average of $2,049. These declines can be attributed to the increased supply of rental units, as well as a decrease in demand due to economic uncertainty and affordability challenges. Additionally, the report notes that population growth has slowed down, which has also contributed to the decline in rents.
Provincial Rent Trends
When measured by province, average apartment rents in December declined 5.4% in British Columbia to $2,353 and 3.2% in Ontario to $2,257. Alberta and Quebec also recorded decreases of 2.7% to $1,671 and 1.9% to $1,934, respectively. However, not all provinces experienced declines, with Saskatchewan seeing a 7.1% increase in average asking rents to $1,395, and Nova Scotia and Manitoba experiencing increases of 1.8% to $2,268 and 1% to $1,633, respectively. These varying trends across provinces highlight the complexity of the Canadian rental market and the need for region-specific analysis.
Major Market Trends
Across Canada’s six largest markets, annual rent decreases for apartments were steepest last month in Vancouver, down 7.9% to $2,654, and Toronto, down 5.1% to $2,498. Both cities saw average asking rents fall to their lowest levels since early 2022. Average asking rents for apartments fell 5% in Calgary to $1,824 and 2.3% in Montreal to $1,952. Ottawa’s average asking rent ticked 0.5% lower to $2,153, while Edmonton saw rents grow 0.8% to $1,518. These trends in major markets suggest that the rental market is experiencing a correction, with rents adjusting to more sustainable levels.
Outlook for the Rental Market
Looking ahead, Hildebrand notes that rents are likely to continue trending down in the near-term as the current conditions persist. The combination of record-high apartment completions, slowing population growth, economic uncertainty, and affordability challenges is expected to continue to put downward pressure on rents. However, it’s essential to note that rents remain 14.1% higher than pre-pandemic levels in December 2019, despite being 5.4% lower than two years ago. This suggests that while the rental market is experiencing a decline, it is still relatively strong compared to historical levels. As the market continues to evolve, it’s crucial to monitor trends and adjustments in the rental market to understand the implications for renters, landlords, and the broader economy.