Canada’s rental housing landscape is undergoing a significant shift in 2025, as key metropolitan areas witness a downturn in asking rents. This trend, largely attributed to falling numbers of international students and temporary foreign workers, offers a window of opportunity for newcomers entering the country’s competitive rental market.
According to the Canada Mortgage and Housing Corporation (CMHC), reduced population growth and an increase in housing supply have begun easing rental pressures in cities that previously faced severe affordability challenges.
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Key Markets See Rent Drops
New data from CMHC’s 2025 Mid-Year Rental Market Update highlights noticeable declines in advertised rents across urban centres like Vancouver, Calgary, Toronto, and Halifax. Year-over-year, asking rents fell between 2% and 8% in these cities during the first quarter of 2025.
For instance:
- Halifax recorded the largest rent drop, with an 8.3% decrease.
- Vancouver’s advertised rents declined by 4.8%.
- Calgary saw a reduction of 3.6%.
- Toronto experienced a more modest 1.7% decrease.
These changes mark a reversal from previous years, where rent prices had climbed steadily due to overwhelming demand and limited availability.
Supply Expands as Demand Slows
The softening market is a result of two converging factors: a rising number of completed rental units and slower population growth driven by tighter immigration and study permit policies.
CMHC notes that many landlords—particularly those with newly built properties—are struggling to fill vacancies, prompting incentives such as free rent for a month, moving allowances, and signing bonuses.
Additionally, Canada’s purpose-built rental completions have surpassed the average of the past decade, contributing to a more competitive housing landscape and more options for renters.
Immigration Policy Impacts Rental Demand
The federal government’s decision to place caps on international student permits and adjust the distribution of foreign students by province is having a measurable effect on rental demand, especially in education-heavy markets such as Ontario, British Columbia, and Nova Scotia.
From January to April 2025, Canada’s overall population grew by just over 20,000 people—a dramatic slowdown compared to recent years. The decline was largely driven by a 61,000-person drop in temporary resident numbers, including those on work and study permits.
This shift has particularly impacted urban centres with high concentrations of temporary residents, such as Toronto, Vancouver, and Halifax, where rent prices had previously surged.
Rent Affordability: Progress, but Still a Long Way to Go
Despite the dip in asking rents, overall affordability remains a concern in many regions. Rent-to-income ratios—the percentage of household income spent on rent—have remained stubbornly high in several cities.
For example:
- Toronto’s rent-to-income ratio rose to 16.4% in 2025.
- Vancouver’s ratio remained elevated at 17.8%.
- Halifax, Calgary, and Montreal hover between 13%–14%, still above pre-pandemic levels.
Although advertised rents are now more stable, these ratios suggest that wage growth has not kept pace with housing costs, especially for lower-income earners and new immigrants.
Rent Control Landscape Across Provinces
One way newcomers can navigate high housing costs is through understanding rent control laws, which vary significantly across Canada.
Currently:
- British Columbia, Ontario, and Prince Edward Island have active rent control measures.
- Nova Scotia enforces a 5% annual cap on rent increases until 2027.
- Alberta, Quebec, and several other provinces do not have rent control policies.
Importantly, Ontario’s rent control only applies to buildings occupied before November 15, 2018, leaving many newer units exempt.
Understanding these regional policies can help newcomers make informed decisions about where to settle, potentially saving them significant costs over time.
What Lies Ahead
With fewer international students and foreign workers expected through the rest of 2025, rental markets in cities like Toronto and Vancouver may continue to cool. However, experts caution that while asking rents may stabilize or drop temporarily, the broader issue of housing affordability in Canada remains unresolved.
CMHC predicts continued adjustments throughout 2025 as supply and demand gradually rebalance. For renters—especially newcomers—this period may offer a rare chance to secure more affordable accommodations in previously overheated markets.
Bottom Line
The easing of Canada’s rental market offers a welcome, if temporary, relief for tenants, particularly immigrants and international students arriving in 2025. While affordability challenges persist, declining demand, growing supply, and regional rent controls are collectively shifting the housing dynamic—making now a potentially favorable time for new renters to explore their options.
Tip for Newcomers:
Always check whether the unit you’re renting falls under provincial rent control laws and compare multiple listings. Negotiating lease terms and exploring secondary rental markets can lead to significant savings.
