Rent Report for Newcomers: Prices and Demand Continue to Fall

 

Understanding and navigating the Canadian rental market is essential for newcomers to Canada and international students. Besides getting a job, finding an affordable rental home in Canada is a top priority. Rent Report for Newcomers to Canada focuses on helping immigrants understand the Canadian rental real estate market, which cities and regions are affordable and what the average apartment rent is in Canada and popular provinces such as Ontario, B.C. and Alberta. The latest rental trends show Canada continues to be solidly a renters market in early 2025.

According to the most recent rent report from Rentals.ca and Urbanation, the average asking rent across Canada fell to $2,100 in January, That's down 4..4% compared to January 2024 and marks an 18-month low.

The Canadian rental market has now seen four straight months of annual rent declines after experiencing 38 consecutive months of annual rent increases. 

 

Rents in Canada Keep Falling

According to Urbanation president Shaun Hildebrand, “the downward trend for rents in Canada accelerated during the first month of 2025.” 

While that's good news for newcomers to Canada and international students, affordability remains an issue and a major concern for all renters. 

A recent study by the IG Wealth Management Financial Confidence Index in partnership with Ipsos Canada showed that 56 percent of Canadians expect housing affordability to worsen.

David Aizikov of Rentsync says the Canadian rental market is in a "transitional period." 

Rents are falling, and Aizikov says that rental demand in Canada has cooled over the past year, leading to lower prices. Whether rental demand has bottomed out and will pick up in the spring remains to be seen, said Aizikov, predicting how much it rebounds should soon become apparent. 

 

 

Studio and 3-Bedroom Units in High Demand

 

Average asking rents for condominiums in January fell 6.5% annually to $2,219. Meanwhile, asking rents for houses and townhomes fell 8.9% from January 2024 to an average of $2,144. As for the purpose-built rental market, average asking rents dropped slightly by 1.7% to $2,070.

Meanwhile, asking prices for purpose-built studio and three-bedroom apartment rentals rose 0.5% year-over-year to $1,583 and 2.1% annually to $2,654, respectively. 

From January 2024, rents for all condominium apartment unit types fell. The most significant decrease was 6.8% for a one-bedroom unit to $2,020. Two-bedroom units dropped 6.6%  to $2,333. Studio and three-bedroom condos experienced smaller decreases.

Studio and three-bedroom rentals are in high demand as renters seek affordable options and shared accommodations.

Meanwhile, shared accommodations listings in January were up 42%, and roommate rents fell 7.6% year-over-year to $933, the lowest level in 18 months. Roommate rents in Alberta were down 2.7% from January 2024, and in Ontario, they dropped 2.6% year-over-year, 

 

 

Ontario Led Rent Price Decreases

 

Once again, Ontario recorded the steepest rent declines in Canada, with a 5.2% year-over-year drop in January apartment rents and an average rent of $2,329.  Apartment rent declines in British Columbia hit 2.6% year-over-year, remaining the country's most expensive province, with an average rent of $2,463 for purpose-built and condominium apartments. 

In Nova Scotia, rents fell slightly, with a 0.7% year-over-year decrease, resulting in an average apartment rent of $2,195. Apartment rents in Quebec were flat, with a 0.4% annual increase to $1,966.

 The country's most affordable provinces - Alberta, Saskatchewan, and Manitoba - saw average asking rent prices for apartments increase in January with Manitoba leading the way at 3.1% to an average of $1,599. Average rents in Saskatchewan and Alberta increased by 2.7% ( $1,311)  and 2.4% ($1,731).

 

Canadian Rents Still Remain High

 

Part of the reason affordability remains a challenge for Canadian renters is that average asking rents nationally are still 5.2% higher than two years ago and 16.4% higher than three years earlier. Looking at unit size price changes in January:

Across property types in Canada:

• Rentals within houses and townhouses saw the most significant annual decline in asking rents in 2024, dropping by 8.9% from January 2024 to an average of $2,144.
• Condominium rents in January were down 6.5% year-over-year to an average of $2,219.
• Units within purpose-built rentals had a 1.7% year-over-year decrease in January in average asking rents to $2,070.

 

 

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Rent Prices in Toronto Keep Falling 

 

Toronto, one of the most popular cities with newcomers and international students, saw apartment rents fall annually for the 12 consecutive months in January, dropping 7.6% year-over-year to an average of $2,615 (a 30-month asking price low). 

Calgary, another popular landing spot for newcomers, had the second-largest annual decline in apartment rents among Canada’s biggest cities, dropping 6.0% to an average of $1,925. Rents in Calgary have now fallen year-over-year six months in a row. In Vancouver, apartment rents have now fallen for 14 consecutive months. They were down 5.2% year-over-year in January to an average of $2,896. Since July 2023, rents in Vancouver have decreased 13% ($443 per month) from a record high of $3,340.

 

 

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Among Canada's largest cities:

According to the Rentals.ca report, apartment and condo rents keep falling year-over-year in many of Canada's  largest rental markets:

TORONTO  - Canada's largest city (a popular landing spot for immigrants) saw an 8% year-over-year decline in January to an average of $2,658. The asking price for a one-bedroom in Toronto in January was $2,353.

VANCOUVER - Apartment rents in Canada's second-largest city, another popular destination for immigrants, fell 5% year-over-year in January to an average of $2,896. The asking price for a one-bedroom in Vancouver in January was $2,522.

CALGARY -  Alberta's most expensive city saw rents fall 6% year-over-year in January to an average of $1,925. The asking price for a one-bedroom in Calgary in January was $1,600.

OTTAWA - The nation's capital had a 0% annual decrease in January in apartment rents, recording an average of $2,214. The asking price for a one-bedroom in Ottawa in November was $2,026.

 

(Drone footage by Lvfree Adventures)

 

MONTREAL  - The largest city in Quebec has a decline of 2% in January year-over-year to an average of $1,986. The asking price for a one-bedroom in Montreal in November was $1,729.

EDMONTON - Canada’s sixth largest continued to have annual rent increases, with a growth of 3% in January to an average of $1,529.  The asking price for a one-bedroom in Edmonton in January was $1,331.

 

 

Other Rental Report Highlights:

 

• The vacancy rate nationally stands at 2.2% for purpose-built rentals.
• Average asking rents for purpose-built rentals decreased 1.7% to $2,070.
• Vancouver and Toronto remained the most expensive cities to rent in Canada. The average asking price for an apartment rental in Vancouver was $2,896 per month, down 5.2% annually, while Toronto’s average rents fell to a 30-month low of $2,615 — down 7.6%.
• Calgary also saw a significant decrease, with average apartment asking rents down 6% to $1,925.
• On an annual basis, rent nationally was down $96 in January, marking a 4.4% year-over-year decline and an 18-month low.
• Ontario renters saw the most relief, with average rent in January falling 5.2% annually to $2,329 per month, compared to $2,632 in December, a more than $300 difference in one month.
• North Vancouver is still the most expensive city in Canada with an average apartment rent of $3,060 in January, despite falling 4.6% compared to Jan. 2024.

 

 

• Oakville, Ontario, is second among Canada’s most expensive small- and mid-sized cities, with an average apartment rent of $2,802.
• The difference in rent between Vancouver (ranked No. 1) and Fort McMurray (ranked No. 35) was $1,311.
• Most of the 25 most expensive small- and mid-sized cities for apartment rents were in the Greater Vancouver and Greater Toronto Areas.
• Windsor, at $1,545,  continues to have the cheapest one-bedroom rent in Ontario among mid-sized markets in Canada. St. Catharines was Ontario's second cheapest mid-sized city at $1,689.

 

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What's the long-term rental outlook for newcomers?

 

Ubranation's Hildebrand predicts that "heightened downside risks for the economy (tariffs), combined with declining international population inflows and multi-decade highs for apartment completions, suggest rents will continue to weaken in the months ahead. 

"This will result in improved affordability for renters.”

As for the impact of tariffs on rent prices, Jacob Dubé of the Globe and Mail writes that "the tariff threat might have a silver lining if you’re a Canadian renter, as rents could actually drop as landlords seek to lock in tenants ahead of any economic uncertainty."

In late January, the Bank of Canada lowered its interest rate to 3% from 3.25%, its sixth consecutive cut

Meanwhile, the Bank of Canada has lowered its interest rate six times in less than a year, and it now sits at 3.25% as of February 2025. Whether there will be more cuts in the months ahead depends mostly, experts say, on the effect proposed U.S. tariffs have on the Canadian economy. 

The string of significant interest rate cuts has lowered mortgage rates and prompted some renters to enter the home-buying market, thus freeing up more rental units across the country. 

 

 

In addition, the Canadian government has capped international student permits and limited the number of temporary foreign workers allowed into Canada to help ease the rental crisis. 

These two new policies have eased pressure on rental housing demand in some markets, particularly cities with large universities.

Canada has also reduced permanent resident targets from 500,000 to 395,000 in 2025, down to 380,00 in 2026, and set a target of 365,000 in 2027.

All of the above moves are expected to impact rental demand and prices throughout 2025

Don't forget that Statistics Canada recommends that no more than 30 to 35% of your monthly income should go towards rental costs. In January, the average asking rent for all residential properties in Canada was $2,100, which means newcomers would need an income of more than $80,000 to keep rent within the 30% range. 

Considering shared accommodation can be a smart strategy for newcomers in 2025.

According to Giacomo Ladas of Rentsync, "the demand for studio and three-bedroom apartments has grown rapidly in major Canadian cities, with shared accommodations becoming a favoured choice for both landlords and tenants." 

Ladas points out that three-bedroom apartments or condo units allow increased "flexibility and affordability" for families seeking long-term rentals and individuals willing to share rent. Studios, said Ladas, remain the most affordable units for newcomers who want to live independently.

 

 

Summary for Newcomers to Canada: 

 

With inflation (now at 1.9%) and interest rates continuing to fall, Canadian rent prices will likely continue falling in big cities like Vancouver and Toronto but rise in some mid-sized and smaller centres, such as western Canada and the Maritimes.

The affordability search will remain a key motivator for renters. Shelter costs are the No. 1 cost of living expense for most Canadians.

Whether you're looking to rent or buy in Canada, staying current about Canadian housing trends and being proactive is essential. 

Pay attention to interest rates and inflation, as these impact housing.

Also, there could be a federal election in Canada, and it's unknown what impact the looming threat of U.S. tariffs will have on the Canadian economy and rental asking prices in 2025.

It remains vital for newcomers and international students to understand the regional differences regarding rental prices and rental demand in Canada so you can choose your new home wisely and make the right decision for your housing and career needs.

As rental supply continues to struggle to meet demand and affordability remains a concern, newcomers and international students must do their city research before they arrive in Canada.

Rental experts advise starting your search  60 days before when you plan to move in.

 

 

Rental Action Plan for Newcomers:

 

• Be sure to do your research BEFORE arriving in Canada.
• Follow Rentals for Newcomers for the latest rental news and trends.
• Investigate using a real estate agent to help you find a rental.
• Look for landlords and property owners offering incentives.
• Consider the benefits of becoming a housemate in a home-sharing program.
• Prepare a realistic budget before you start looking, and have realistic expectations about what you can afford in the city where you want to settle.

 

Sources:

 

Rentals.ca, Rentsync,  Canadian Press, CBC, CMHC, Ipsos Canada