Canadian Rents Have Fallen for Two Straight Years. What Should Landlords Do at Renewal?

Canadian rents are falling for a second straight year, and September brought another decline. According to the Rentals.ca National Rent Report, prepared with Urbanation and released October 7, 2026, the average asking rent for all residential properties was $2,034, down 4.2% from a year earlier. That is the 24th consecutive month of year-over-year decline, and rents now sit 9.2% below their May 2024 peak of $2,202.

"Two straight years of falling rents is the longest downturn the Canadian rental market has seen in recent history," said Shaun Hildebrand, President of Urbanation.

If you own or manage rentals, this changes how you should think about two decisions: what to ask for a vacant unit, and whether to raise rent on the tenant you already have. This guide walks through what the numbers mean, where the market is weakest and strongest, and how to make both decisions with your own figures.

First, what "asking rent" measures

The Rentals.ca report tracks asking rents: the prices on new listings. It is the fastest-moving signal in the market, because it reflects what landlords are trying to get for units available right now.

It is not:

• The rent your current tenants pay. A sitting tenant's rent only changes with a lawful increase or a new agreement. A falling market does not lower anyone's existing lease.
• The rent units actually sign for. In a soft market, signed rents often land below the asking price, after a counter-offer, a free month or a few extra weeks of vacancy.
• An average of your street. A national figure blends studios in Vancouver with houses in Edmonton. It tells you the direction of the market, not the price of your unit.

So read the headline as direction and momentum: listings are competing harder for tenants than they were a year ago, and that pressure is now two years old.

Where rents fell, and where they didn't

The decline is not even. The biggest drops are in the units that compete most directly with new supply.

Studio condos fell furthest of all, down 9.6%.

Two patterns stand out. Condos and secondary rentals are falling about three times faster than purpose-built apartments. Many of these units are owned by individual investors who list at the same time as new condo towers complete, so they compete head to head for the same tenants. And the smallest units are falling fastest while the largest are holding up best: studios are down nearly 10%, three-bedroom purpose-built units less than 1.5%.

The large cities are falling more slowly than the national average:

Province by province

Asking rents for apartments and condos moved very differently across the country in the year to September:

• Ontario: −3.7%. The largest drop of any province. The City of Toronto fell only 1.4% overall, but some local markets fell far faster: Scarborough (−10.9%), Kingston (−10.8%) and Oakville (−10.8%) were among the steepest declines in the country.
• Alberta: −3.4%. Calgary (−3.9%) and Edmonton (−3.2%) posted the largest annual declines of Canada's six biggest cities.
• Manitoba: −3.4%, though asking rents ticked up 0.3% from August.
• British Columbia: −2.3%. Still the most expensive province, at an average of $2,373 for apartments and condos. BC rents rose 0.8% from August, one of the clearest signs of a market levelling off.
• Saskatchewan: +0.4%. One of only two provinces where asking rents rose.
• Nova Scotia: +1.2%. The other riser, and now the second most expensive province for apartments and condos at $2,321, though rents dipped 1.5% from August.

If you own in more than one province, do not apply one renewal strategy to the whole portfolio. A unit in Saskatoon and a unit in Scarborough are in different markets this year.

The markets bucking the trend

National averages hide strong local markets. Outside the six largest cities, the three most expensive places to rent were all in Metro Vancouver: North Vancouver ($2,983), Richmond ($2,572) and Burnaby ($2,548).

The biggest year-over-year increases included Barrie, up 17.4%, though Rentals.ca notes most of that jump came from a single large new building leasing up at higher prices, and Lloydminster, up 11.6%. And within Toronto, three-bedroom rents rose 1.8% to $3,586, while the city's overall average fell.

The lesson for landlords: family-sized units and some smaller markets are behaving differently from small condos in big cities. If you own a three-bedroom, a house or a unit in a smaller market, check your local numbers before assuming you need to cut.

Decision 1: pricing a vacant unit

Asking rents are what landlords hope to get. In a falling market, the gap between the asking rent and the rent you actually sign widens, and it shows up as days on market.

The arithmetic is simple. On a $2,000 unit, every empty day costs you roughly $66. A month empty costs you $2,000, which is the same as cutting the rent by $167 a month for a full year.

A worked example

Say comparable two-bedrooms near you are renting at about $2,000, and you are tempted to list at $2,100 to "see what happens."

The $100 premium only pays if the unit rents within about two and a half weeks of when the $2,000 version would have. In a market where asking rents have fallen for 24 months, that is a bet against the trend.

What to do

• Price from recent listings and signed leases near you, not from last year's rent or a national average. Look at comparable units listed in the last 30 days and how long they took to rent.
• Set a review date when you list. If you have no qualified applications after 10 to 14 days, the price is the problem, not the photos.
• Compete on what new buildings can't offer. Much of the new supply is condos and purpose-built towers. A larger unit, parking, a yard, in-suite laundry or flexible move-in dates are reasons to choose you at the same price.
• Consider incentives before cutting the rent. A free first month or a parking spot keeps your base rent higher, which matters in provinces where future increases are capped as a percentage of the current rent.
• Screen as carefully as ever. A quick rental to the wrong tenant costs far more than two weeks of vacancy. A softer market gives you more applicants to choose from, not a reason to skip checks.

For more on this, see What an Empty Unit Actually Costs You Per Day and How Property Managers Can Cut Vacancy Days.

Decision 2: renewing a sitting tenant

For units under rent control, the guideline sets the maximum increase, not a target. In Ontario, the 2027 guideline is 1.9%, and notices for 2027 increases are already being served (see The N1 Window for 2027 Opens October 3). British Columbia's 2027 limit is 2.2%, down from 2.3% in 2026. Alberta has no cap, but still requires proper notice.

When market rents are falling, the real question is not "how much am I allowed to raise?" but "what does it cost me if this tenant leaves?"

Run the comparison:

1. The increase. 1.9% on $2,000 is $38 a month, or $456 a year.
2. The cost of turnover. One month of vacancy ($2,000), plus cleaning, paint, listing time and the risk of re-renting below the current rent in a market that is 4% lower than a year ago.

A tenant who pays on time and looks after the unit is usually worth more than a year of guideline increases. That doesn't mean skipping the increase. In a rent-controlled unit, an increase you skip is gone for good, because next year's increase is calculated on this year's rent. But it does mean:

• Take the guideline increase where the rent is already at or below market, and serve the notice correctly and on time.
• Think twice where the current rent is already above what comparable units now ask. A tenant who checks listings and finds the same unit for less is a tenant who gives notice.
• For units exempt from rent control (in Ontario, generally units first occupied for residential purposes after November 15, 2018), you can raise by more than the guideline with proper notice. In this market, it is often the fastest way to create a vacancy.

A renewal checklist

Before you serve a notice for any unit, answer five questions:

1. Where is the current rent against today's listings? Pull three to five comparable units listed in the last month.
2. What is this tenant worth? On-time payment history, care of the unit and length of tenancy all count.
3. What would a vacancy cost here? Use your own days-on-market from the last turnover, not a guess.
4. What does the rule allow? The guideline, the notice period and the form your province requires.
5. Is the notice date right? A notice served late, or on the wrong form, can cost you the whole year's increase.

Why Canadian rents are falling, and what comes next

Urbanation attributes the decline mainly to a wave of new supply, and notes that in key markets like Toronto and Vancouver, new completions are moving past their peak. If that holds, the decline could slow through 2027. Month-over-month figures already show some markets edging back up, with Vancouver up 1.4% from August.

Two other signals are worth watching. The national average barely moved from August ($2,035) to September ($2,034), which suggests the pace of decline is easing even as the year-over-year figure stays negative. And purpose-built rentals are falling far more slowly than condos, a sign that professionally managed stock is holding its pricing better.

Until the trend turns, the landlords who do best will be the ones who price vacancies from local evidence, protect good tenancies, and count vacancy days as carefully as rent increases.

Frequently asked questions

Will falling market rents lower what my current tenants pay?

No. A tenant's rent only changes through a lawful increase or an agreement between you. Falling asking rents affect what you can get on your next vacancy, and how likely a tenant is to move if their rent is above the market.

Should I skip this year's increase to keep a good tenant?

Usually not, in a rent-controlled unit, because an increase you skip cannot be made up later. But where the rent is already above comparable listings, a smaller increase, or none, can cost less than a vacancy. Run the numbers for each unit.

How do I find comparable rents for my unit?

Search current listings for the same unit type, size and neighbourhood, and note how long each has been listed. Units that have been up for weeks are telling you where the market is not.

Are rents going to keep falling?

No one knows for certain. Urbanation expects new supply in Toronto and Vancouver to move past its peak, which could slow the decline, and some markets are already rising month over month. Plan for a flat-to-soft market through the coming renewal season.

Sources: Rentals.ca and Urbanation, National Rent Report, October 7, 2026 (September 2026 asking-rent data); Ontario, Residential rent increases; BC Ministry of Housing, 2027 allowable rent increase. Asking rents are listing prices, not signed leases or the rents existing tenants pay. Rent-increase rules differ by province and change over time; this article is general information, not legal advice. Check your province's current rules before serving a notice. Quebec is not covered.