From Shortage to Surplus: Canada’s Rental Market Enters a Reset Phase
Canada’s rental market is experiencing a role reversal as housing supply rises while demand eases due to slower immigration and fewer temporary residents
VANCOUVER, British Columbia, Dec. 17, 2025 (GLOBE NEWSWIRE) -- Canada’s rental landscape is undergoing a significant shift as rising housing supply collides with cooling demand amid reduced immigration. Markets that faced years of overwhelming pressure are now showing early signs of rebalancing, giving renters more options and compelling landlords to adjust. New 2025 data points to a turning point that is reshaping conditions across the country’s major urban centres.
Cooling demand: Lower immigration levels signal a turning point
Immigration has slowed sharply in 2025, reshaping pressure points in Canada’s rental and housing markets. Newcomer arrivals fell 19% in the first half of the year, with the decline deepening from 14% in Q1 to 23% in Q2, reducing the immediate demand that had been driving tight vacancy rates and rapid rent growth.
Ontario, Alberta, and B.C.—provinces that typically absorb the largest share of immigrants—saw the sharpest drops, welcoming 15,279, 8,167, and 6,891 fewer newcomers respectively, easing competition for rentals in major urban hubs. At the same time, B.C. now leads the country in emigration, posting an 18% jump in residents leaving Canada, particularly in Q1, which further softens local housing demand and could accelerate changes in market dynamics.
Surging supply: More homes are entering the market
National housing starts continued to climb in 2025, adding supply to a market that has been strained by years of underbuilding. Through Q1–Q3, total starts rose 5.5% year-over-year—from 169,037 to 178,366—with the strongest momentum in semi-detached homes (+15%) and apartments (+8%), while single-detached (-3%) and row units (-2%) posted modest declines.
Ontario remained the country’s construction anchor, generating more than 48,000 starts over the first three quarters and leading Canada in apartment activity, including 13,205 apartment starts in Q3 alone—the highest quarterly total of any province. Meanwhile, Alberta solidified its status as the top province for single-detached homes, recording 3,279 starts in Q1, 4,513 in Q2, and 4,309 in Q3.
Reset underway: Canada’s rental market adjusts
In light of these shifts, Canada’s rental market is undergoing a broad reset, driven by cooling demand and rising supply across both primary purpose-built and secondary rental markets.
Vacancy rates rise in purpose-built rentals
Purpose-built rentals are housing developments designed specifically to be rented long term, rather than sold to individual owners. According to Canada Mortgage and Housing Corporation’s (CMHC) 2025 Rental Market Report, vacancy rates in purpose-built rentals climbed notably in major cities, pushing the national average to 3.1% in 2025—up from 2.2% in 2024 and surpassing the 10-year average.
This trend is even more apparent in Vancouver, where vacancy rates in purpose-built rentals reached 3.7%, the highest level since 1988, and rent growth slowed to a two-decade low. Purpose-built rentals (primary market) have grown to be more expensive compared to secondary market rentals and as more rental units become available in major Canadian cities in 2025 due to completion of heightened supply, and slowed population and economic growth, renter dynamics have fluctuated.
Turnover rates increase
Turnover rate, which measures how frequently rental units change tenants, has increased in recent years, signaling greater renter mobility and interest in “shopping around.” Economic uncertainty, stagnant salary growth and increased housing supply are giving renters more power in a market historically dominated by landlords. Renters are exploring new rental markets in the country and are increasingly willing to move in search of better value. Moreover, higher emigration levels are contributing to increased rental availability, as more units return to the market when residents leave the country.
Affordability challenges persist despite easing conditions
While some markets are beginning to offer modest relief for prospective renters as rent growth slows, overall affordability remains historically strained. Housing and living costs continue to outpace wage growth, leaving many renters with limited financial flexibility. Combined with broader economic weakness, cautious consumer spending, and persistent inflation, any savings from slower rent increases are often offset by rising costs elsewhere.
For a detailed look at city-by-city rental data and emerging trends, visit our latest Monthly Rent Report (MRR). Also, subscribe to our newsletter to be the first to access the 2026 Annual Rent Report — releasing in early February — featuring an in-depth analysis of key factors shaping Canada’s rental landscape, from population trends to the expected influence of the 2026 FIFA World Cup.
Journalists may reference “liv.rent Monthly Rent Report” and provide the link https://liv.rent/blog/rent-reports/ for readers to obtain a copy of the latest rental report.
Data Collection Methodology
Our monthly rent reports use data from our own liv.rent listings, as well as data our team manually collects from other popular listing sites. Our data collection methods differ from some government agencies in that we only include current asking rent prices. Many official reports will include data for entire buildings in their reports, which tends to skew numbers lower since many units are already occupied and may be rent-controlled or rented for significantly lower than the current rates.
For data related to influencing factors, our team refers to data from trusted sources like Statistics Canada, Canada.ca, CMHC, as well as gathering supporting information from media outlets such as CBC News, Calgary Herald, Daily Hive, and Globe and Mail.
For more information on our data collection methodology, please refer to our monthly rent reports.
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Matisse Yiu
Head of Marketing
liv.rent
media@liv.rent
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