The Canadian rental market is undergoing a significant and sustained shift. The latest data for July confirms this trend, with the national average asking rent falling 3.6% compared to the same time last year. As reported by outlets like Canadian Mortgage Trends and Business in Vancouver, this marks the tenth consecutive month of year-over-year decreases, bringing the national average to $2,121.

This cooling trend, which began last fall, is providing a new landscape for both renters and property investors. At Coldwell Banker Horizon Realty, we believe in empowering our clients with clear, factual insights. Here’s a detailed breakdown of what’s happening and what it means for you.

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The National Perspective: A Market Correction

The July decline is the largest drop seen so far in 2025, indicating an acceleration of the market's "prolonged softening phase," as described by David Aizikov, Manager of Data Services at Rentals.ca. The primary driver behind this shift is a fundamental change in supply and demand. A record level of new rental supply is coming onto the market just as moderated immigration levels have tempered the growth in the renter pool. This has increased vacancy rates and prompted landlords to lower asking rents to secure tenants.

However, it's crucial to view this in a broader context. While prices are falling annually, the current average rent is still 2% higher than it was two years ago and 11.1% higher than three years ago, according to a report from Storeys.com. This isn't a market collapse, but rather a correction towards a more balanced environment after years of rapid price growth.

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Provincial and Municipal Hotspots (and Cold Spots)

The national average doesn't capture the full picture, as performance varies significantly across the country.

• Major Declines: Nova Scotia saw the most significant year-over-year drop at 5.0% (average rent $2,275), followed closely by British Columbia with a 4.4% decrease (average rent $2,475). Ontario also saw a notable 3% decline (average rent $2,325).
• Prairie Performance: In contrast, Saskatchewan bucked the national trend, posting a 4% annual rent growth to an average of $1,384, solidifying its position as the country's most affordable province for renters.
• City-Specific Shifts: Major urban centres are feeling the cooldown most acutely. Calgary experienced the largest decrease among major cities, with apartment rents falling 7.9% to $1,927. Vancouver saw a 7.0% decline to $2,830, and Toronto rents fell 4.7% to $2,587.

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A Look at Different Property Types

The data also reveals distinct trends based on the type of rental unit. According to the report cited by CP24, asking rents for houses and townhomes saw the steepest decline, dropping 8.2% to $2,170. Condominium apartments fell 5.7% to an average of $2,202, while purpose-built rental apartments saw a more modest 1.7% decrease to $2,095.

This data is vital for investors, highlighting that while the overall market is softening, the stability of purpose-built rentals remains strong compared to other segments.

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What This Means for Your Real Estate Strategy

• For Renters: This market presents a clear opportunity. In provinces like British Columbia and Ontario, renters now have more negotiating power and a wider selection of properties. The intense competition of previous years has eased, making it an ideal time to find a home that fits your budget and lifestyle.
• For Investors: A nuanced approach is essential. While headline numbers show a decline, specific markets and property types continue to show resilience. The stability of purpose-built rentals and the growth seen in provinces like Saskatchewan highlight where strategic opportunities may still exist. Understanding these micro-trends is key to navigating the current environment.

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The Canadian rental market is in a period of transition. With experts forecasting "continued downward pressure on rents heading into the fall," staying informed is more important than ever.

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To discuss how these market shifts affect your personal real estate goals, contact an expert at Coldwell Banker Horizon Realty today. We're here to provide the clarity and guidance you need to make your next move with confidence.