Market update May 2025: Rent growth returns, but risks loom

Rents rose slightly from February to March as improved affordability drew renters back into the market, says Shaun Hildebrand, President of marketing reporting and consultancy firm Urbanation. Still, rents may face near-term pressure from the expected economic hit and job losses caused by the trade conflict with the US.

• According to Rentals.ca, the average national asking rent saw its first monthly increase in six months – 1.5% from $2,088 in February to $2,119 in March.

• March rent growth likely reflects a seasonal rebound in demand after slower leasing activity in the winter.

• From March 2020 to March 2025, larger purpose-built rentals saw the biggest gains – three-bedroom rents rose 39.6% and two-bedrooms 38.4%, outpacing one-bedrooms (35.3%) and studios (34.2%). All provinces reported annual three-bedroom rent growth in March, likely driven by the rising popularity of shared living as renters seek more affordable options.

• Meanwhile, the Canadian Real Estate Association (CREA) reports an average national home price of $678,331 in March – up 1.5% month over month and down 2.9% year over year.

• CREA also reports a 4.8% month-over-month decrease in home sales in February.

• Ontario continues to have among the highest average home prices in the country (second only to British Columbia) at $860,545 – slightly up by 1.4% on last month’s average.

• Most provinces saw a decrease in their sales-to-new-listings ratios from February 2025. Four remain in seller’s market territory, four in balanced territory, and Ontario still stands alone as a firm buyer’s market.

• The Canada Mortgage and Housing Corporation (CMHC) reports the six-month trend in housing starts decreased 0.7% in March to 235,316 units. Construction in Toronto fell 65% year-over-year, due to decreases in both multi-unit and single-detached starts.

More rental market headlines

How the US-Canada trade war could hit housing – PayProp blog

Canadian rental market sees coming boom in vacancy rates – The Globe and Mail

How to fix Canada’s housing crisis – Maclean’s