Canada’s rental market is undergoing a quiet but significant shift. For years, rising rents and housing shortages sparked concern across major cities. But now, something unexpected is happening: advertised rents are starting to dip in some urban areas. What’s driving this change? A drop in the number of temporary residents, spurred by recent immigration policy changes, may be one of the biggest factors.
Here, we explore how Canada’s rental market is adjusting to evolving immigration dynamics, what it means for renters and landlords, and how these trends could shape affordability in the near future.
Fewer Temporary Residents, Softer Rents
Over 61,000 fewer international students and temporary workers were in Canada between January and April 2025 compared to the same period in 2024. That’s a noticeable change, and it’s already affecting rental demand.
Major cities like Toronto, Vancouver, and Calgary saw advertised rents drop by 2% to 8% year-over-year in Q1 2025. Landlords, especially in newer buildings, are finding it harder to fill units. Some are offering incentives like a month of free rent or moving bonuses just to attract tenants.
Why the decline in residents? Immigration policy has shifted. Canada introduced a cap on international student intake and adjusted provincial distributions for work and study permits. The result? Fewer people entering the rental pool, and landlordsare adjusting to the new reality.
How Supply and Demand Are Shaping the Market
Rental supply is rising. Thanks to initiatives from CMHC like the Apartment Construction Loan Program, Canada saw a record number of purpose-built rentals start in 2024. In fact, 88% of new rental apartment projects last year were backed by CMHC programs.
With more units available and fewer renters competing for them, vacancy rates are increasing. In Toronto, Vancouver, and Halifax, this has led to longer lease-up periods and more pressure on property managers to lower rents or sweeten the deal.
At the same time, many secondary rental markets like individually owned condos are undercutting larger buildings on price just to avoid sitting empty. It’s creating a more competitive environment, which is good news for renters.
The Catch: Affordability Still a Problem
Even with declining advertised rents, affordability is still out of reach for many. That’s because rent increases are still happening, just more slowly in occupied units. Many tenants locked into long-term leases are paying less than newcomers, but turnover pushes rents higher each time someone moves out.
In cities with strict rent controls like Toronto and Ottawa, when tenants leave, landlords reset prices closer to market rates. In fact, the gap between what current and new tenants pay can be as high as 44% in places like Toronto.
And while average asking rents may fall, the actual rent-to-income ratios, a key affordability measure, remain highest in cities like Vancouver and Toronto, where housing costs still eat up a large portion of income.
What It Means for Newcomers to Canada
For newcomers arriving in Canada, these changes are a double-edged sword. Yes, advertised rents are finally stabilizing or falling in some areas. But the overall affordability picture remains tough.
High turnover rents, rising demand for shared spaces, and limited affordable options in central locations mean that finding suitable housing is still a challenge, especially in high-demand cities.
However, there is a silver lining: as population growth slows temporarily and supply continues to rise, renters may gain more options and bargaining power in the months ahead.
Canada’s rental market is clearly in transition. Immigration changes are cooling demand, while new housing supply is giving renters more choices. Yet, despite declining advertised rents, affordability remains out of reach for many.
Still, the current shift marked by reduced pressure on advertised prices signals a potential rebalancing. As Canada’s rental market evolves, policy, population, and economic conditions will continue to shape the path forward.
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