Canadian Rents Are Back To Rising After A Brief Decline

Canadian renters are seeing costs creep up again after a short-lived pause. Average asking rents across Canada are now increasing, ending a brief period of decline. While rates had eased slightly in June, rising year-over-year prices suggest that rental costs are rebounding faster than expected.

The national average rent remains substantially higher than it was just a few years ago. As of the latest report, asking rents are about 21.1% higher than in 2020, growing at an average compound annual rate of 4.9%. That rapid pace has outstripped most income growth, putting significant financial pressure on the average household and shrinking disposable income.

This uptick comes on the heels of a nine-month streak of annual rent declines, which saw average asking rents fall in June to about $2,125—a modest 0.2% drop from the prior month. However, that drop was smaller than previous months, and the year-over-year decline slowed to just 2.7%. That moderation hinted at a market reaching its bottom, but the recent flip back into rising territory shows that the trend may reverse again.

Several factors are driving rents back up. Experts point to restricted supply as a primary cause. Although many new purpose-built rental units are coming online, the pace hasn't kept up with growing demand. At the same time, rising mortgage costs and tight home-buying conditions have pushed more Canadians into the rental market. This combination of strong demand and limited supply is fueling the upward pressure on rents.

For renters, this could mean higher monthly bills just as budgets are already being squeezed. Many Canadians were hoping the extended rent decline was a sign of improved affordability. But with national average asking rents holding 22–23% above five years ago—and climbing again—those hopes may be fading.

Looking ahead, the rental market’s direction will depend on how new housing supply keeps up, and whether economic factors like interest rates and wage growth shift. If more rental units become available and incomes rise, pressure could ease. But without that balance, higher rent could become the new normal for many Canadians.