The Big Shift: Canada’s 2025 Rental Market Is Finally Loosening
- Chelsea Guo
- Dec 14, 2025
- 2 min read
If you’ve been looking for an apartment in Canada over the last few years, you know the drill: high prices, dozens of applicants for every unit, and zero room for negotiation. But according to the latest data from CMHC, the tide is starting to turn. In 2025, the national rental market has reached a turning point that could mean more options—and better deals—for tenants.
1. Vacancy Rates Hit a 10-Year High
The most striking headline from the report is the national vacancy rate for purpose-built rentals, which climbed to 3.1% in 2025. This is a significant jump from the 2.2% we saw in 2024 and is now comfortably above the 10-year average. For the first time in a long while, the "landlord's market" is cooling off.
2. A "Perfect Storm" of Supply and Demand
What’s driving this change? It’s a combination of two powerful forces:
A Construction Boom: After years of government incentives and a focus on rental development, a record number of new units finally hit the market in 2025.
Cooling Demand: Changes in immigration policy (specifically for temporary residents and international students) have slowed population growth. Combined with a softer job market, the frantic rush for housing has subsided.
3. The Return of the "Incentive"
Perhaps the best news for renters is the return of competition among landlords. In major cities, we are seeing the resurgence of signing bonuses, moving allowances, and "one month free" promotions.
More importantly, "Turnover Rents" (the price for a new lease) have actually declined in cities like Vancouver, Calgary, and Toronto. While the average rent paid by all tenants is still up slightly due to lease renewals, the price for someone entering the market today is much more competitive than it was a year ago.
4. A Tale of Four Cities
The market shift isn't happening at the same speed everywhere. Here’s how some major hubs are performing:
Vancouver: Saw its vacancy rate surge to 3.7%—the highest since 1988—with rent growth hitting a 20-year low.
Toronto: Purpose-built vacancies reached 3.0% for the first time since the pandemic, though the condo rental market remains tighter at 1%.
Calgary: Remains a hotspot for newcomers; despite an 11% increase in supply, the vacancy rate stayed stable at around 5.0%.
Montreal: A notable outlier. Rent here actually surged by 7.2%, driven by new legal guidelines and a push from landlords to catch up with market rates.
The Bottom Line
While housing affordability remains a long-term challenge in Canada, 2025 marks a move toward a more balanced and healthy market. If you’ve been waiting to move or upgrade your living situation, now is the time to negotiate. With more units sitting empty, landlords are once again having to work to earn your business.
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