After years of record demand, Canada’s rental market is beginning to cool as reduced immigration levels ease pressure on housing demand nationwide. Recent reports show rent prices are dipping across major cities, a shift linked to declining newcomer arrivals in early 2025. In Toronto, for instance, the average rent for a one-bedroom apartment dropped by $176, while Calgary, Montreal, Edmonton, and Metro Vancouver also reported moderate decreases. This marks the first nationwide rental adjustment in nearly five years.

How Lower Immigration Is Impacting Rent Prices

The slowdown in population growth has been most pronounced in Ontario, which welcomed over 15,000 fewer immigrants compared to 2024. Similar declines were seen in Alberta and British Columbia, while only the Northwest Territories and Nunavut recorded small increases. With fewer newcomers arriving, rental competition in major hubs has eased, allowing landlords to adjust prices to more sustainable levels.

In provinces like Quebec, even minor declines in immigration have softened demand, a clear indicator that the rental market’s cooling trend is spreading beyond major metropolitan areas.

Interprovincial Migration Is Reshaping Regional Rental Markets

While national immigration has slowed, Canadians are moving more actively between provinces. Alberta gained nearly 13,000 new residents, while Ontario lost over 11,000 to other regions. This internal migration is helping rebalance housing demand across the country.

Interestingly, Atlantic Canada, particularly Nova Scotia and Prince Edward Island, continues to experience growth, with migration increases of 66% and 363%, respectively. These regions are benefiting from both affordable living costs and strong job markets, maintaining steady rental demand even as other provinces cool.

A Balanced Market Emerging

Economists suggest that this shift signals the start of a rebalancing period for Canada’s rental market. While rents remain high historically, the rate of increase has slowed, providing much-needed relief for tenants. The decline in immigration also allows time for new housing supply to catch up, particularly in cities that have struggled with vacancy shortages since 2021.

A Temporary Relief or Long-Term Trend?

While lower immigration is currently easing rental pressures, experts caution that this may be temporary. As Canada continues to rely on newcomers to fill labour shortages, immigration levels are likely to rise again in the coming years. For now, however, Canada’s rental market appears to be stabilizing, offering a window of opportunity for renters across major cities.