Why are Canadian asking rents falling, and what does it mean for renters?

Canada’s average asking rent for all property types was $2,036 in October, down 3.2 per cent from a year earlier — the 25th consecutive month of year-over-year declines, according to the Rentals.ca / Urbanation November 2026 National Rent Report. That figure is what landlords advertise on vacant listings; it is not the same as the rent most tenants already pay, and the gap between the two is the story for renters.

Key facts

• National asking rent (all property types): $2,036 in October 2026, −3.2% year over year, the smallest annual decline since February 2026; month over month +0.1% from September (Rentals.ca / Urbanation).
• Versus two years earlier: −5.4% from October 2024, the lowest October average since 2022. Serious Pick reported September’s $2,034 / −4.2% / 24th month (peak May 2024: $2,202).
• Property types (October): purpose-built $2,040 (−2.1%); condo $2,048 (−5.5%); house/townhouse $2,016 (−6.0%).
• CMHC 2025 purpose-built vacancy: national 3.1% (from 2.2% in 2024); Toronto 3.0%, Vancouver 3.7%, Calgary 5.0%, Montreal 2.9% (CMHC Dec. 11, 2025 release; balanced ranges in the June 2026 mid-year update).
• CMHC said the average rent paid by all tenants for two-bedroom units rose 5.1% in 2025, driven in part by units repriced higher at turnover, even as landlords offered incentives such as a free month, moving allowances and signing bonuses.

What are asking rents, and how do they differ from CMHC paid rents?

Asking rent is the price advertised for a vacant unit. Rentals.ca and Urbanation track listings across purpose-built apartments, condos, houses, townhomes and basements — the primary and secondary markets. Their averages usually sit above CMHC figures because vacant units can reset to market rates where rent rules allow, and because listings include larger units such as houses, while CMHC’s average rent blends the whole purpose-built stock, including long tenancies that often sit below current listing prices. Rentals.ca notes the two series answer different questions: what a prospective tenant sees online versus what households on average actually pay.

That distinction matters. A national asking-rent drop does not rewrite every lease. Provincial rent-increase rules, turnover timing and whether a landlord is competing for a new tenant all shape what happens to an occupied unit. CMHC’s mid-year update puts it plainly: asking rents move with short-term supply and demand; paid rents change more gradually.

Why are asking rents falling?

Four forces show up consistently in CMHC and Rentals.ca reporting.

Supply. Completions of purpose-built rentals hit historically high levels. CMHC’s 2025 Rental Market Report tied the national vacancy rise to that wave of new stock landing as population and economic growth slowed. Newer buildings (post-2020) carry the highest vacancies; older, lower-rent stock remains tighter.

Slower demand and immigration. Toronto’s vacancy climb reflected weaker immigration and less international-student demand, CMHC said. Montreal’s rise tracked fewer non-permanent residents.

Condo competition. In Toronto and Vancouver, landlords told CMHC they faced added competition from a surge of newly completed condo apartments rented out, many of which couldn't be absorbed in the ownership market. CMHC expects that competition to fade as condo completions fall sharply in the coming years. Rentals.ca says Toronto condo starts have dropped to marginal levels, implying fewer new investor units competing for tenants in future.

Incentives instead of only price cuts. Purpose-built operators have been more resilient on headline rents (−2.1% nationally) partly because they lean on concessions: a month free, free or discounted parking, gift cards, move-in credits and cash bonuses. CMHC market intelligence described incentives intensifying through early 2026. Condos and houses/townhouses posted steeper asking-rent cuts (−5.5% and −6.0%).

'The window for cheaper rents is closing in Toronto and Vancouver,' Urbanation president Shaun Hildebrand said in the report's news release, adding that renters still have the advantage in Calgary, Edmonton and much of Ontario outside Toronto, where rents continue to fall.

How do Toronto, Vancouver, Calgary and Montreal compare?

October 2026 apartment-and-condo averages from Rentals.ca, set beside CMHC’s 2025 purpose-built vacancy rates (and the preliminary balanced ranges CMHC estimated in June 2026):

Toronto — Asking average $2,590, +1.6% year over year (first annual increase after 32 months; month over month +1.4%). Two-year change: −2.0%. Larger units led the turn (2-bed $2,971, +2.8%; 3-bed $3,643, +4.3%), while 1-beds were still −1.2% at $2,233. CMHC vacancy 3.0%, inside its 2.5–4% balanced range.

Vancouver — Asking average $2,735, +0.2% year over year (first after 34 months; month over month −0.2%). Two-year: −7.1%. One-beds ($2,385, −3.2%) and two-beds ($3,297, −1.7%) were still below year-ago levels; three-beds rose 2.6% to $4,042. Vacancy 3.7%, highest since 1988 and above CMHC’s 2–3% balanced range.

Calgary — Asking average $1,806, −2.4% year over year (month over month −0.9%). Two-year: −9.5%, the steepest among the six largest, with declines across 1-, 2- and 3-bedroom listings. Vacancy stable at 5.0%, inside a wider 3–5.5% balanced range; Rentals.ca says Calgary added more new supply relative to its size over the past year than any other large market; CMHC said Calgary's purpose-built supply grew 11% in 2025, the fastest pace in decades.

Montreal — Asking average $1,948, −0.3% year over year (month over month −0.5%). Two-year: −1.9%. Unit sizes were roughly flat. Vacancy 2.9%, within CMHC’s 2.5–4% range. Mid-year, CMHC still described Montreal asking rents as little changed; October data remains close to flat.

Ottawa also edged up (+0.3% to $2,170). Rentals.ca’s pattern: Toronto and Vancouver peaked first and are stabilizing first; Calgary is deeper in a supply-led correction.

For how rent shapes take-home pay by province, see Serious Pick’s six-figures comparison. Related reading: the October 2026 housing tradeoffs matrix and Big Six mortgage coverage.

What does this mean for renters?

New leases versus renewals. Softer asking rents and wider incentive menus matter most when someone is signing a new lease. Renewals on occupied units follow provincial rules and landlord practice; CMHC still recorded rising average paid rents in 2025, including the 5.1% national gain on two-bedroom paid rents, driven partly by turnover repricing.

Negotiating power is uneven. Newer, higher-priced buildings with more vacancy give prospective tenants more choice than older, cheaper stock where vacancies stay low. CMHC finds turnover highest in the most expensive rent quartiles and much lower in the cheapest — and Calgary’s broad vacancy differs from Toronto and Vancouver, where the bottom quartile remains tight.

City, product and incentives. A Toronto two- or three-bedroom listing already shows annual asking-rent gains; a Calgary one-bedroom does not. Condo and house/townhouse listings fell harder than purpose-built apartments. A free month, parking or move-in credit can change effective first-year cost without a large sticker cut. Tenancy rules differ by province and territory.

What happens next — and why Toronto and Vancouver matter?

Rentals.ca says the markets where rents peaked first are now the first to stabilize: Toronto condo starts have dropped to marginal levels, Hildebrand attributes the turn to declining supply, and annual declines have flipped to small gains on apartment and condo averages. If those cities hold annual increases, markets that peaked later — Calgary’s deeper two-year drop is the clearest case — may follow with a lag, or stay softer if supply keeps outrunning demand.

CMHC’s mid-year outlook still expected easing as new units take longer to absorb and condo competition stays elevated near term, even as younger-adult household formation continues. The open question is pace: whether national declines keep narrowing (October’s −3.2% was the mildest since February) or whether the Toronto/Vancouver turn is a pause.

Watch three gauges: the next Rentals.ca print for whether Toronto and Vancouver hold positive year-over-year apartment-and-condo growth; CMHC’s next vacancy survey for whether national purpose-built vacancy stays near or above 3%; and whether purpose-built operators keep preferring incentives over headline cuts.

Bottom line

Canada’s asking-rent correction is real, long (25 straight months of year-over-year declines) and narrowing. It mainly improves choice and effective cost for people shopping vacant listings — especially in supply-heavy segments and cities like Calgary — while paid rents on occupied stock have still been rising and Toronto/Vancouver apartment-condo averages have already turned slightly higher year over year. What any household pays next depends on city, building age, product type and provincial tenancy rules.

This article is general information for Canadian readers and is not legal or financial advice. Residential tenancy rules, including rent-increase limits, differ by province and territory; check with your provincial or territorial residential tenancy office or a qualified professional about your situation.