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, the largest since the COVID-19 pandemic
- Average asking rents are down 5.4% compared to two years ago, but still 14.1% higher than pre-pandemic levels in December 2019
- 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
- Average apartment rents declined in most provinces, with the steepest decreases in Vancouver and Toronto, down 7.9% and 5.1% respectively
Introduction to the Canadian Rental Market
The Canadian rental market has experienced a significant shift in recent months, with average asking rents falling for 15 consecutive months. According to the latest report from Rentals.ca and Urbanation, December 2025 marked the 12th month of year-over-year declines, with average asking rents dropping 2.3% to $2,060. This trend is a notable reversal from the rapid growth seen in the market between 2022 and 2024, and it has been driven by a combination of factors, including record-high apartment completions, slowing population growth, economic uncertainty, and affordability challenges.
Factors Contributing to the Decline in Rents
The decline in rents can be attributed to a number of factors, including a surge in new apartment completions, which has increased the supply of available units and put downward pressure on prices. Additionally, slowing population growth and economic uncertainty have reduced demand for rental properties, further contributing to the decline in rents. As Urbanation president Shaun Hildebrand noted, "A combination of record-high apartment completions, population growth slowing down, economic uncertainty, and affordability challenges has worked together to push down rents." These factors are expected to continue influencing the market in the near term, with Hildebrand predicting that rents will likely continue to trend downward.
Provincial Variations in Rent Declines
The decline in rents has not been uniform across the country, with different provinces experiencing varying levels of change. In British Columbia, average apartment rents declined 5.4% year-over-year to $2,353, while in Ontario, rents fell 3.2% to $2,257. Alberta and Quebec also saw decreases, with average rents falling 2.7% to $1,671 and 1.9% to $1,934, respectively. In contrast, Saskatchewan saw a significant increase in average asking rents, with a 7.1% rise to $1,395. Nova Scotia and Manitoba also experienced increases, with average rents rising 1.8% to $2,268 and 1% to $1,633, respectively.
Market Trends in Major Cities
The report also highlighted the trends in Canada’s six largest markets, with Vancouver and Toronto experiencing the steepest annual rent decreases. In Vancouver, average asking rents fell 7.9% to $2,654, while in Toronto, rents declined 5.1% to $2,498. Both cities saw average asking rents fall to their lowest levels since early 2022. Calgary and Montreal also saw declines, with average rents falling 5% to $1,824 and 2.3% to $1,952, respectively. Ottawa’s average asking rent ticked 0.5% lower to $2,153, while Edmonton saw rents grow 0.8% to $1,518.
Implications of the Decline in Rents
The decline in rents has significant implications for the Canadian rental market, particularly for renters who have been struggling with affordability. The decrease in rents may provide some relief for renters, although it is worth noting that average asking rents remain 14.1% higher than pre-pandemic levels in December 2019. The trend also highlights the importance of monitoring the market and adjusting to changing conditions, as the rental market can be highly volatile. As the market continues to evolve, it will be important to keep a close eye on the factors driving the decline in rents and how they may impact the market in the future.
Conclusion and Future Outlook
In conclusion, the decline in average asking rents in Canada is a significant trend that reflects the changing dynamics of the rental market. With a combination of factors contributing to the decline, including record-high apartment completions, slowing population growth, economic uncertainty, and affordability challenges, it is likely that rents will continue to trend downward in the near term. As the market continues to evolve, it will be important to monitor the trends and adjust to changing conditions, particularly in major cities like Vancouver and Toronto, where the decline in rents has been most pronounced. By understanding the factors driving the decline in rents and their implications for the market, renters, landlords, and policymakers can better navigate the complex and dynamic Canadian rental market.