Rental Market Sees Rising Vacancies and Falling Prices – A Mixed Outlook
This week, rental prices are trending downward as vacancy rates climb, creating opportunities for tenants but potential challenges for landlords. Plus, a look at Canada’s lowest fixed and variable mortgage rates, and one standout home on the market.
Rental Market Shift
A new report highlights a surge in rental vacancies across Canada, leading to a 4.8% national drop in average asking rents to $2,088—the fifth consecutive monthly decline, according to Rentals.ca and Urbanation Inc.
As Shane Dingman reports, this trend could benefit renters searching for more affordable options, particularly in newer developments. However, it poses risks for preconstruction buyers preparing to take ownership of newly completed condos.
Despite falling asking rents, Dingman notes that many tenants locked into existing leases won’t see immediate relief. More significantly, developers relying on sustained rent growth to justify luxury rental projects may now face a cooling market.
For landlords of newly completed condos, the shift presents financial strain. “Much of Toronto’s condo rental market is already priced at levels that don’t cover the average mortgage,” Dingman explains. “With rents still under pressure, it could be a while before these landlords break even.”
Toronto Real Estate Market Cools Amid Tariff and Economic Uncertainty
Realtors in Toronto and beyond report a near standstill in the market, with many bracing for a 25% to 50% drop in business this year. According to the Canadian Real Estate Association, uncertainty surrounding tariffs sent home sales plummeting nationwide, with February seeing a 9.8% seasonally adjusted decline from January. New listings also fell sharply, down 12.7% in the same period.
However, as Carolyn Ireland notes, some realtors are beginning to see signs of a market rebound, with sales slowly picking up. Still, economic uncertainty has many buyers and sellers choosing to wait on the sidelines, hoping for clearer conditions ahead.