Rental Market Shifts: Tenants Gain with Lower Prices, Incentives

UPDATE: The rental market across Canada is witnessing a dramatic shift as landlords roll out enticing incentives and lower prices to attract tenants. Just revealed, many properties are now offering up to three months of free rent, along with bonuses such as $500 move-in credits and complimentary internet service.

This trend comes on the heels of a significant increase in vacancy rates and a general decline in rental prices, creating a tenant-friendly environment. According to real estate experts, the balance has tipped in favor of renters as the fallout from the post-pandemic rental surge continues. “It’s a race to the bottom,” stated Marco Pedri, a Toronto-based broker with Shoreline Realty. He highlighted the intense competition among landlords, which is leading to increasingly generous offers.

The latest data shows that average asking rents across Canada fell by 3.1% in 2025, marking the 15th consecutive month of year-over-year declines. In December alone, rents decreased by around 8% in Vancouver, 5% in Toronto and Calgary, and slightly less in Montreal and Ottawa. Even though the national average asking rent stood at $2,060, it remains nearly 3% higher than three years ago and around 14% above pre-pandemic levels.

The implications of this rental market shift are significant. With over 180,000 units currently under construction in Canada, the influx of new apartments is expected to provide even more options for renters. “The math works better for rentals than for large home ownership projects right now,” noted Mathieu Laberge, Chief Economist at Canada Mortgage and Housing Corporation (CMHC).

As demand for ownership wavers amidst declining sales prices and lower interest rates, more individuals are opting to rent rather than buy. “In 2025, the need for real estate hasn’t changed, but how people chose to access it was a lot more on the leasing side,” said Tom Storey from Royal LePage Signature Realty.

Despite the favorable conditions for renters, concerns about affordability persist. With the rental market still reeling from economic uncertainties linked to trade issues, many potential buyers have adopted a cautious approach, prolonging their time in rental units. “People were staying in their rental apartments longer, and we weren’t seeing turnover rates increase,” remarked Giacomo Ladas of Rentals.ca.

As the year progresses, experts predict that the rental market will remain favorable for tenants. With increasing supply and stagnant demand, vacancy rates are likely to continue climbing. Both Pedri and Laberge agree that landlords may prioritize tenant relationships over maximized profits, suggesting that substantial rent hikes are unlikely in the near future.

As Canadians navigate the evolving rental landscape, many are taking advantage of the current opportunities to secure more favorable living conditions. With the prospect of increased supply and reduced prices, renters can afford to be more selective about their living arrangements, potentially improving their quality of life during this transitional period.

For those in the market for a new rental, now may be the best time to seize advantageous deals and incentives before the market dynamics shift again. Stay tuned for further developments in this rapidly changing rental environment.