Canadian apartment rents declined for the 17th consecutive month in February, with the national average asking rent falling to $2,030 — the lowest level in nearly three years, says a new report from Rentals.ca and Urbanation.

Rents continued to drop across Canada’s largest markets, with notable year-over-year declines recorded in Toronto, Vancouver, Calgary, Montreal, Ottawa and Edmonton, although several cities posted modest monthly increases as the market shows early signs of stabilizing.

“Canada is undergoing its largest downturn in rents in recent history,” said Shaun Hildebrand, president of Urbanation.

The seasonal slowdown in the rental market was more pronounced than usual in February, with asking rents declining 1.3% month-over-month — the largest February drop since 2020. Despite the national decline, Vancouver (+1.3%), Ottawa (+1.1%), Montreal (+0.7%), Calgary (+0.1%) and Edmonton (+0.9%) all recorded slight increases compared with January.

Lower rents combined with moderate wage growth have also improved affordability. In February, the average rent represented 29% of renter household income, falling below the industry’s 30% affordability benchmark for the first time in more than six years.

Urbanation said the arrival of new rental supply at a time of slowing demand is driving the downturn.

“The supply that everyone has been waiting so long for has arrived at a time when demand has slowed, creating a rare opportunity for renters to take advantage of better affordability,” said Hildebrand.

Rent declines over the past year were led by the secondary market. Condo rents fell 5.1% annually to an average of $2,082, while other secondary-market units dropped 4.5% to $2,009. Purpose-built rental apartments proved more resilient, with average rents declining 1.9% year-over-year to $2,030.

By unit type, one-bedroom rents posted the largest annual decrease, falling 3.5% to $1,781. Three-bedroom rents were the only segment to increase, rising 0.6% to an average of $2,486.

At the provincial level, rent declines were concentrated in Canada’s largest provinces. Average apartment rents fell 4.4% in Alberta, 4.3% in Ontario and 4.2% in British Columbia, while Quebec recorded a 3.1% decline. Saskatchewan was the only province to see notable growth, with rents rising 3.3% year-over-year to $1,373.

Among Canada’s six largest rental markets, average apartment rents declined year-over-year across all cities. Toronto recorded the steepest declines across most unit types, including studio rents (-7.9%), one-bedroom rents (-6.9%) and two-bedroom rents (-7.1%). Vancouver posted the largest drop for three-bedroom units at 8.8%.

The report also highlighted sharp rent declines in several suburban markets surrounding major cities. Oakville recorded a 14.6% annual drop, followed by New Westminster, B.C.(-12.8%), Surrey, B.C. (-11.3%), Vaughan, Ont., (-11.0%) and Kanata, Ont. (-10.1%).

Meanwhile, the average asking rent for shared accommodations across British Columbia, Alberta, Ontario and Quebec fell 6.6% year-over-year in February to $900. Shared accommodation rents declined most in British Columbia (-10.1%) and Ontario (-8.3%), while Ottawa (+5.6%) and Edmonton (+2.0%) posted increases.

Rentals.ca and Urbanation evaluated rents in single and semi-detached homes, townhouses, condo apartments rented out by their owners, rental apartments and basement suites.

The two organizations are related entities.

Graphic: Courtesy of Rentals.ca and Urbanation