But there are still some metros where rents have increased in recent months
Investors in residential real estate for the rental market are likely to have seen income generation ease in recent months as rents in some major metros have come under pressure.
A new release from Statistics Canada shows that in the third quarter of 2025 the average advertised rent for two-bedroom apartments fell in 24 of the country’s 40 largest census metropolitan areas, including notable drops in major markets such as Toronto Census Metropolitan Area (–3.9 %) and Vancouver Census Metropolitan Area (–5.9 %).
In dollar terms, rents dropped to around $2,720 in Toronto and about $3,190 in Vancouver, while even in Montréal Census Metropolitan Area the asking rent for a two-bedroom dipped by 1.0 % to roughly $1,930.
The softening comes as population growth decelerated sharply with Canada’s growth rate slipping to just 0.1 % in the first half of 2025, the slowest pace since 2020, at the height of the pandemic. At the same time, construction has surged with over 148,000 new dwellings completed in metropolitan areas during the first three quarters of the year, of which more than 64,000 were rental units.
In contrast, the third quarter of 2025 saw year-over-year rent growth for two-bedroom units across the Prairie markets of Saskatchewan and Manitoba. Saskatoon led with a 6.0% increase, followed by Winnipeg at 4.5% and Regina at 2.1%. Similar gains were recorded elsewhere in the country, including Drummondville, Quebec (+11.5%), Greater Sudbury, Ontario (+7.1%) and Nanaimo, British Columbia (+6.6%).
For property owners and real estate investors, weakening rents in many metros may signal pressure on cash flow with lower asking rents reducing gross income and tightening gross yields, particularly for those who bought with optimistic yield projections. Coupled with more supply, landlords may face longer vacancy periods or need to offer concessions to attract tenants.
However, the softening of rents will be good news for Canadians on lower wages who may have been forced to rethink their housing options as shelter costs increased faster than wages. A recent Zoocasa report highlights that the average rent for a one-bedroom unit in Toronto of $2,295, requires an annual income of $86,062 to stay within the affordability threshold.
