According to the latest report, February saw a 4.8% drop in rents compared to the previous year, bringing the national average down to $2,088.
“Rents in Canada are softening as supply is outweighing demand,” said Shaun Hildebrand, president of Urbanation. “Apartment completions are currently running at record highs, while at the same time, population growth has slowed and the economy faces heightened risks due to a potential trade war with the U.S. Expect rents to continue decreasing in the near term as these trends likely remain in place.”
This shift marks a stark reversal from last year when rents were surging by double digits. In February 2024, asking rents had jumped 10.5% annually. Now, with rents down by an average of $105 per month compared to a year ago, tenants are finding some relief. However, the report notes that rents are still 5.2% higher than two years ago and remain $302 per month above levels from five years ago.
Condo Rents Experience Sharp Declines
One of the most significant declines has been in the condo rental market. Average asking rents for condo apartments fell 7.6% year-over-year, hitting a 26-month low of $2,192. Studios and one-bedroom units saw the steepest drops, down 10% and 8.8%, respectively, while two-bedroom condos decreased by 7.6% to an average of $2,323. Even three-bedroom condos, which tend to be in high demand, saw a 3.5% decline to $2,757.
Meanwhile, purpose-built apartments experienced a more modest decline of 1.9% annually, averaging $2,070.
Where Rents Have Dropped the Most
Several major rental markets across Canada saw rent prices decline over the past year. Vancouver’s one-bedroom rents fell by 5.1%, while Toronto experienced a similar drop of 5.4%. Calgary saw one of the sharpest decreases, with one-bedroom rents plummeting 7.5% year-over-year.
Other Ontario cities, including Mississauga, Brampton, and North York, also saw rent declines between 3% and 4%. However, not all markets followed this trend—cities like Guelph and Halifax saw rent increases of around 5%.
Financing and Refinancing Opportunities for Rental Properties
With rental rates softening and property values stabilizing, this may be an opportune time for real estate investors to refinance their existing rental properties or secure financing for new investments. Lendworth offers customized mortgage solutions to help investors optimize their rental portfolios, whether by refinancing to access equity or obtaining financing for additional properties.
If you own a rental property and are looking to refinance or expand your holdings, Lendworth provides flexible mortgage options tailored to your investment goals. Contact us today to explore your financing opportunities.