Market Insight for October 9

Average asking rents fall 4.2% in September, marking 24 months of decreases. Canada’s rental market continues to cool, with rents falling for the second straight year, according to a monthly report from Rentals.ca and Urbanation. The report says this is now the longest period of annual declines the Canadian rental market has seen in recent history.

The average asking rent for a rental unit in September was $2,034, down 4.2 per cent from a year earlier.

Rents have now fallen 7.3 per cent over the past two years and are 9.2 per cent below their peak of $2,202 in May 2024.

There is, however, some good news for renters. Statistics Canada figures included in the report show that average weekly earnings have increased 19.4 per cent over the past five years, meaning rental affordability has generally improved.

Rents also dipped slightly from August, falling $1 from $2,035. This was the second consecutive monthly decline and follows a fairly typical seasonal trend, with rental demand usually stronger through the spring and summer before easing in the fall.

Ontario saw one of the larger declines among the provinces, with average rents across all property types down 4.8 per cent year-over-year. Rents fell 2.9 per cent in B.C., 2.6 per cent in Alberta and 1.7 per cent in Quebec. Some provinces went the other way, with rents increasing 1.4 per cent in both Nova Scotia and Saskatchewan.

Looking at rents on a square-foot basis, the average asking rent across Canada’s six largest markets was $2.48, down 1.5 per cent from September 2025.

Purpose-built apartment rents fell 2.7 per cent from a year earlier to an average of $2,036 in September. Condo apartment rents fell more sharply, dropping 7.8 per cent to $2,052. Purpose-built apartments had the smallest annual decline of all property types.

Condos continued to see the biggest drop, with studio condo rents falling 9.6 per cent. Other types of rental properties, including houses and townhomes, were down 7.4 per cent year-over-year to $2,016.

The report suggests there may finally be some signs of stability in Toronto and Vancouver, where rents have fallen to their lowest levels in five years.

Urbanation president Shaun Hildebrand said the increase in rental supply has been the main reason behind the correction, but that new supply is now moving beyond its peak in major markets such as Toronto and Vancouver.

He also noted that rents in both cities have moved higher over the past six months, while the annual declines have become much smaller as renters who had been waiting on the sidelines begin returning to the market.

The report points to several reasons why Toronto and Vancouver could see a return to positive rent growth. Construction inventory has peaked, population data has been revised to show a modest increase, and both cities are somewhat less exposed to tariffs because of the makeup of their labour markets.

For renters, the combination of lower rents and move-in incentives could also bring more people back into the market. The report suggests that some households delayed moving because of high rents and instead stayed with parents or roommates for longer.

With rental prices now more affordable and supply beginning to level off, the next few months could be an important turning point for Canada’s rental market.