Drop in Temporary Residents Leads to Lower Rent Prices in Canada
Canada’s Rent Prices Fall as Temporary Resident Numbers Decline
In a notable turn from recent years of relentless rent increases, Canada’s rental market is showing clear signs of cooling in 2025. Recent insights from the Canada Mortgage and Housing Corporation (CMHC) suggest that a combination of reduced demand and surging housing supply is beginning to shift the balance in favour of renters.
Between January and March 2025, major cities such as Toronto, Vancouver, Calgary, and Halifax recorded noticeable drops in advertised rental prices, some falling by as much as 8%. This change is largely linked to a drop in temporary resident populations, including international students and foreign workers, who have historically driven up housing demand in urban centres.
Supply Grows While Demand Recedes
While Canada has long battled housing shortages, the first half of 2025 has marked a turning point. An increasing number of new rental units—many of them purpose-built—have been added to the market, boosting competition among landlords. In response, property owners are now offering incentives to attract tenants, including rent discounts, free utilities, or upfront move-in bonuses.
CMHC reports that these supply increases are outpacing demand growth in many urban areas, especially as international migration slows. Vacancies are becoming more common in cities where rental bidding wars were once the norm.
Immigration Shifts Drive Downward Pressure on Rents
Canada’s evolving immigration policies have played a major role in reshaping the rental landscape. Tighter controls on international student admissions and stricter work permit regulations have led to a significant decrease in the temporary resident population.
In the first quarter of 2025, Statistics Canada recorded a drop of over 61,000 temporary residents, which had a direct impact on rental demand in major cities. Ontario, British Columbia, and Nova Scotia—home to large numbers of post-secondary institutions—are among the provinces most affected by this change.
This policy shift has not only reduced immediate housing demand but is also influencing long-term rental market expectations, especially near universities and urban job centres.
Rental Affordability Sees Minor Relief
Although the current rental climate is more favourable for tenants, affordability challenges persist. The percentage of income required to cover rent—known as the rent-to-income ratio—remains high in several regions.
- Toronto and Vancouver continue to post the highest ratios, nearing or exceeding 17%.
- Cities like Halifax, Calgary, and Montreal show modest improvements but still hover around 13–14%, well above historic norms.
In essence, while advertised prices may be dropping, many households still find themselves stretching their budgets to secure adequate housing.
Rent Control: A Tool for Tenant Stability
For many renters—particularly newcomers unfamiliar with Canadian housing rules—rent control policies can provide critical financial protection. However, the rules governing rent increases differ by province.
- Ontario, British Columbia, and Prince Edward Island maintain rent control frameworks.
- Alberta, Saskatchewan, and Quebec currently do not enforce such regulations.
- Nova Scotia has temporarily capped rent increases at 5% per year through the end of 2027.
Understanding whether a unit is covered by rent control is vital, as new constructions in some provinces may be exempt from these protections.
Metro Areas Now Ineligible for Low-Wage LMIA Applications
The following Census Metropolitan Areas (CMAs) now fall under the exclusion list due to jobless rates exceeding the 6% threshold:
| Family Size | Minimum Required Funds (Annual) |
|---|---|
| 1 person (student only) | CAD $22,895 |
| 2 people | CAD $28,502 |
| 3 people | CAD $35,040 |
| 4 people | CAD $42,543 |
| 5 people | CAD $48,252 |
| 6 people | CAD $54,420 |
| 7 people | CAD $60,589 |
| Additional family member | CAD $6,170 |
These figures represent a significant increase from the earlier requirement of CAD $20,635 for a single applicant, which had been in effect since January 1, 2024.
Canada’s Housing Market Readjusts
As 2025 progresses, CMHC forecasts continued adjustment in Canada’s rental sector. The combination of slower population growth, fewer temporary visa holders, and increased rental inventory is likely to maintain downward pressure on rent prices—at least in the short term.
However, housing affordability remains a structural issue. Income growth has not kept pace with rental costs in most cities, and the rent declines currently seen may not be enough to offset years of housing stress for low- and middle-income Canadians.
Opportunities for Newcomers
For those planning to move to Canada in 2025, this evolving landscape may offer better entry points into the housing market. Prospective tenants are advised to:
- Explore rental markets beyond downtown cores.
- Compare rates across both primary and secondary markets.
- Investigate rent control laws based on the province and building age.
With better awareness and strategic planning, newcomers can take advantage of a rare window of affordability in Canada’s rental market.
Final Thoughts
Canada’s rental market is experiencing a rare cooling phase, driven by policy shifts, slower migration, and improved housing availability. While not a full solution to the country’s housing affordability crisis, these changes mark a notable shift in tenant-landlord dynamics, especially in cities long known for sky-high rents.
For those entering Canada now, the timing couldn’t be better to explore more affordable rental options.
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