Market update July 2025: New supply, low demand, flat rents

Asking rents are easing across the country, largely due to an increase in rental supply and slower population growth. With fewer international students coming to Canada, some landlords are offering incentives like move-in bonuses and gift cards to fill vacant units.

• According to Rentals.ca, the average national asking rent edged up $2 month over month from April to $2,129 in May.

• Rents have declined year over year for eight months in a row including in May – but they’re still up 5.7% compared to two years ago, and 12.6% over three years ago.

• Three-bedroom purpose-built rentals were the only segment to see annual growth, with national average rents for this housing segment rising 3.9% in May to $2,743 (1.5% to $3,074 in Ontario), likely due to growing interest in shared living as renters look for more affordable options.

• Meanwhile, the Canadian Real Estate Association (CREA) reports an average national home price of $691,299 in May – up 1.7% month over month and down 1.1% year over year.

• Ontario continues to have among the highest average home prices in the country (second only to British Columbia) at $861,719 – up 0.2% from last month’s average.

• According to CREA, home sales were up 3.6% month over month from April to May, marking the first monthly gain in activity since November 2024.

• Sales-to-new-listings ratios remained steady across most provinces from April. Four remain in seller’s market territory (with sales outnumbering listings), three in balanced territory, and Ontario still stands alone as a firm buyer’s market.

• “It’s only one month of data, and one car doesn’t make a parade, but there is a sense that maybe the expected turnaround in housing activity this year was just delayed for a few months by the initial tariff chaos and uncertainty,” says Shaun Cathcart, CREA’s Senior Economist.

• The Canada Mortgage and Housing Corporation (CMHC) reports the six-month trend in housing starts was flat from April to May, least measured at 243,407 units. Construction in Toronto fell 22% year over year, largely due to decreases in multi-unit starts.

More rental market headlines

Tenants pushing for maximum heat bylaw – CBC

Competition Bureau warns landlords, property managers about illegal discussions on rents – Financial Post

Prefab homes are putting more people in quality housing – PayProp blog