Market update July 2026: New rent increase guideline

Ontario has set its 2027 rent increase guideline at 1.9%, down from 2.1% in 2026.

The maximum increase has edged downward in recent years to counteract the rising Consumer Price Index and improve tenant affordability.

Still, landlords are feeling the pressure of higher operating costs, including rising insurance premiums, but in some cases, landlords can pursue an Above Guideline Increase.

• Rentals.ca reports the national average asking rent reached $2,029 in May. That’s an increase of 0.1% from April, but falls short of the typical seasonal uptick, pointing to a slower-than-usual start to the summer rental market.

• You can put the blame on broader economic pressures, including rising unemployment and Canada's Q1 2026 technical recession. Rentals.ca expects these factors to continue weighing on rents through the second half of the year.

• In Ontario, average asking rents remained essentially flat, inching up from $2,226 in April to $2,229 in May.

• Meanwhile, the Canadian Real Estate Association (CREA) reports an average national home price of $702,079 in May – up 1% from April and 1.5% year over year.

• Ontario continues to have among the highest average home prices in the country (second only to British Columbia) at $847,813 – up 1% from last month’s average.

• According to CREA, home sales volumes jumped up 5.5% from April to May.

• “The national sales increase from April to May was broad-based but driven disproportionately by Ontario, suggesting the HST rebate on new builds may have only briefly drawn the attention of buyers away from the existing home market,” said CREA Senior Economist Shaun Cathcart.

• The Canada Mortgage and Housing Corporation reports the six-month trend in housing starts was virtually flat in May, with a slight month-over-month increase of 0.5% to 258,010 units.