Canada’s rental market is going through a significant shift—and the latest 2025 Mid-Year Rental Market Report from the Canada Mortgage and Housing Corporation (CMHC) offers valuable insights for renters, landlords, and investors alike.

Here are the four key takeaways you should know:

1️⃣ Rental Vacancy Rates Are Rising

Across Canada, vacancy rates have started to climb. One of the main reasons? A surge of new purpose-built rental housing entering the market. These are apartment buildings designed specifically for long-term renting. The increase in rental supply is easing the pressure on tight markets, and CMHC expects this trend to continue throughout 2025.

2️⃣ Rent Increases Are Slowing Down

For the first time in years, rent growth is starting to lose steam. This is due to a combination of factors:

  • Tighter student visa policies, which are reducing rental demand from international students

  • Higher unemployment, impacting affordability

  • Greater rental supply, increasing competition among landlords

As a result, average rents—while still high—are not rising as quickly as they were over the past few years.

3️⃣ Toronto Rents Remain Higher Than Last Year

Despite broader national trends, rents in Toronto remain elevated. In fact, average rent for a two-bedroom unit is still up 10% compared to the same time last year. This is partly because rent control in Ontario only applies to existing tenants. When a lease ends and a unit is re-rented, landlords can raise the rent to current market rates—making rent-controlled units and newer apartments almost equally priced.

4️⃣ CMHC Is Playing a Major Role in Rental Housing Development

To address the housing supply crisis, CMHC is actively supporting rental construction. An impressive 88% of purpose-built rental projects that began construction in 2024 received CMHC financing. This reflects a major policy push to encourage more dedicated rental stock and ease affordability pressures.

Please note that, CMHC’s report covers both primary and secondary rental markets:

  • The primary rental market refers to purpose-built rental apartments.

  • The secondary rental market includes privately owned condos, basement apartments, or houses rented out by individual owners.

Canada’s rental landscape is evolving. While rising vacancy rates and slower rent growth may offer relief for tenants, it also signals the need for landlords and investors to be more strategic. Property location, unit type, tenant profile, and long-term demand will matter more than ever.

If you’re a renter looking for better options, or an investor navigating these shifts, I’m here to help! Let’s connect and explore how these trends impact your personal situation and goals.