The 2025 Mid-Year Rental Market Update from Canada Mortgage and Housing Corporation (CMHC) shows there has been a decline in advertised rents in the country’s largest cities in the first quarter of the year, including in Calgary. CMHC attributes the declines to an increase in rental properties, but the drop in rates has not occurred in all cities in the country. The report says advertised rents in Calgary, Toronto, Vancouver and Halifax fell between 2% and 8% year-over-year. However, Edmonton, Ottawa, and Montréal saw rent increases, year-over-year, but at a slowing pace from previous quarters. “Since October 2024, advertised rents are declining due to increased supply,” says the CMHC report. “While rents for occupied dwellings continue to rise at a slower pace than a year ago.” By CMHC’s measure, 88% of new purpose-built rental apartment starts in 2024 received financing or insurance through the Apartment Construction Loan Program and CMHC’s multi-unit mortgage loan insurance products, representing a very large increase from 5% in 2017, a sign of the expanding role of federal initiatives in the housing sector. “CMHC products and programs have played a key role in supporting rental supply across Canada," the agency said, adding cities such as Calgary and Montreal are benefiting from the soaring uptake of financing tools such as the MLI (mortgage loan insurance) Select program. .According to the report, lower international migration and slowing labour markets are contributing to lower demand for rental accommodations, highlighting Vancouver, Toronto, and Halifax. With unemployment among younger demographics and graduate unemployment hovering above long-term averages, landlords have been forced to change their marketing and business plans. According to CMHC, landlords in some areas are offering incentives to potential tenants. “Vacant units are taking longer to lease,” says the agency, pointing to the better-supplied markets of Calgary, Toronto and Vancouver. Some incentives include a month free of rent and other bonuses. CMHC’s jury is still out whether the reduced rents and increased supply have had a significant effect on affordability. “Rental affordability isn’t improving, especially in Vancouver and Toronto as turnover rents are driving increases,” said CMHC, adding in Toronto, the rent gap between occupied and vacant units reached 44% in 2024. CMHC cautioned with rent-to-income ratios remaining high in major cities, the financial stress on renters continues, with many now choosing shared accommodations or looking for larger multi-bedroom units to keep costs in line. Going forward, look for vacancy rates to continue to rise in 2025, says CHHC, adding more investment in rental supply is required on an on-going basis to satisfy projected long-term population growth and affordability goals.
