Some rent listings decline, but affordability still worsens

Rent listings in a few of Canada’s most expensive cities have begun to decline. However, the average renter is still paying more each year and falling further behind on affordability.

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Rent listings in a few of Canada’s most expensive cities have begun to decline. However, the average renter is still paying more each year and falling further behind on affordability.

According to the Canada Mortgage and Housing Corporation’s 2025 Mid-Year Rental Market Update, advertised rents for two-bedroom purpose-built apartments declined in Vancouver, Toronto, Calgary and Halifax. However, only Calgary and Halifax saw rent-to-income ratios fall — each of them by less than a percentage point.

Despite small declines in asking rents for two-bedroom condominium rentals in Vancouver and Toronto, both cities saw increases in rent-to-income ratios, reaching 17.8 per cent and 16.4 per cent, respectively.

The rent-to-income ratios are based on assuming two full-time earners to represent gross household income.

In Toronto, the average asking rent for purpose-built two-bedroom units fell by 3.7 per cent annually. Vancouver saw a 4.9 per cent drop, while Calgary and Halifax posted declines of 3.5 and 4.2 per cent, respectively.

“Since October 2024, advertised rents are declining due to increased supply, while rents for occupied dwellings continue to rise at a slower pace than a year ago,” CMHC reported.

Affordability has worsened irrespective of these declines.

“Despite easing rent growth and increasing supply, rental affordability isn’t improving — especially in Vancouver and Toronto as turnover rents are driving increases. Calgary, however, has shown a slight improvement,” reads the report.

Landlords are reporting that new units are taking longer to lease amid increased vacancies, especially for new purpose-built rental units in Toronto, Vancouver and Calgary, where they are competing with non-purpose-built housing.

“Purpose-built rental operators are responding to market conditions by offering incentives to new tenants such as one month of free rent, moving allowances and signing bonuses,” reads the report. “Nevertheless, some operators anticipate they may need to lower rents over the next couple of years.”

Still, rent for occupied units continued to climb in each of the seven municipalities referenced. In Halifax, it jumped 17.1 per cent annually. Toronto and Calgary posted gains of 10.7 and 7.9 per cent, respectively.

CMHC acknowledged that federal housing policy has heavily influenced the rental supply.

“CMHC construction financing programs and products supported an estimated 88 per cent of Canada’s new purpose-built rental apartment starts in 2024.”

However, critics have questioned the shift toward government-subsidized rentals and modular housing.

“The reality is, they’re afraid to bring prices down because they don’t want to upset homeowners, but they also don’t want to lose renters,” Vancouver realtor John Coupar wrote for True North. “So they talk about ‘stabilizing’ the market and building ‘affordable rentals’—but it’s a fantasy.”

True North previously reported that Prime Minister Mark Carney’s housing mandate will ensure forever-renters, not future homeowners.

Carney has proposed building half a million modular homes annually, but Conservatives argue that homeownership—not renting—should be the goal.

Housing experts have also coined Carney’s housing plan as “just smoke and mirrors.”

The report suggested that the rising cost of living across the board for Canadians will turn more Canadians into renters, and that they’ll have to rent with more people.

“Stakeholders have noted increasing financial pressures on renters. As affordability pressures persist, more tenants are expected to turn to shared living arrangements, further boosting demand for 3+ bedroom apartments,” reads the study. “This shift may make it harder for smaller units to attract tenants as households prioritize space-sharing to save money.”