May 2026 be the
?
After 15 straight months of
, the facility steadiness might lastly be swinging again into the palms of tenants, one thing that ought to come as a aid to cash-strapped Canadians, although not all might be in place to take benefit.
On the finish of 2025, the common asking lease for all properties within the nation was $2,060 per thirty days, based on leases.ca, nonetheless excessive by historic ranges however beneath the height of $2,202 hit in Might, 2024.
With slowing demand and a nonetheless
growing supply of units coming onto the market
, all indicators level to condo rents persevering with their decline all through the remainder of 2026.
“I feel this might be an fascinating yr as a result of by the tip of 2025, we had detrimental inhabitants progress, which was fairly shocking,” mentioned Giacomo Ladas, affiliate director of leases.ca, which tracks rental costs throughout the nation.
On the availability entrance, there are nonetheless 180,000 items underneath building throughout the nation, a small fraction of the prevailing three-million-plus flats on the market, however vital sufficient to
.
“Emptiness charges are growing, and for the remainder of 2026, provide will outweigh demand,” mentioned Ladas. “I don’t suppose incentives are going to be going away. Renters are taking much more time with their selection due to the slowdown in demand.”
Carl Gomez, chief economist with Centurian Asset Administration, which owns a personal REIT with 23,000 items, mentioned the market wanted that provide after many years of undersupply, however warned that not all of it’s hitting the mark.
“There’s lots of extra, which has helped the emptiness fee. However you do need to dig beneath the floor of what’s being added, and a very good chunk of provide is
not filling the gap for the demand in the market
,” he mentioned, pointing to small one-bedroom items. “They arrive to market, and they don’t seem to be essentially reasonably priced for the common renter.”
Regardless of rents being down 5.4 per cent over the past yr, they continue to be 14.1 per cent above the degrees seen on the finish of 2019, based on leases.ca.
It’s a longtime precept that not more than 30 per cent of your gross revenue ought to go in direction of lease. That might imply a median revenue of $82,400 only for a typical condo in Canada, with the determine a lot increased in Toronto and Vancouver. So, sure,
we are still talking about affordability
.
It’s not an actual shock to see teams just like the Affiliation of Neighborhood Organizations for Reform Now, or ACORN, against even a modest 2.1 per cent guideline improve for lease in Ontario. Individuals simply can’t afford that in some elements of the rental world.
The image, although, could also be worse for landlords, whose earnings don’t look all that tangible in the present day, and who’re seeing the worth of their holdings weaken in a softer market.
There’s nothing notably spectacular about returns within the multifamily sector, with cap charges or the return on funding pegged at anyplace from 4 per cent to possibly 5.25 per cent in some Canadian cities, based on actual property agency Avison Younger.
Funding demand has climbed from private-sector consumers who see long-term upside in rents, if not in 2026. Caught within the center are
coping with market values in the present day, with unit costs depressed and sinking.
Within the final six months, we’ve got seen two Ottawa-based REITs, InterRent and Minto House, which collectively have near 25,000 items, seeking to go personal as a result of they’ve been so badly valued within the public markets.
Mario Saric, an analyst with Scotia Capital, kicked off a report on the funding financial institution’s twenty first condo panel by saying there won’t be a twenty second subsequent yr.
“(The) long-term basic image is nice,” Saric mentioned in his report. “New provide progress ought to decelerate rather a lot in 2027 and past, notably because it
pertains to new condo deliveries
. Regardless of a narrowing within the premium price of proudly owning vs. renting, rental continues to be financially extra interesting, in our view, notably with restricted prospects of fabric house worth beneficial properties.”
Even when home costs aren’t dropping as precipitously from a peak in 2022 when the Canadian Actual Property Affiliation’s home worth index was greater than $800,000, they’re nonetheless falling and are properly beneath $700,000 in the present day. There is no such thing as a concern of lacking out on the housing market.
Sam Kolias, government of Western Canada’s largest REIT, Calgary-based Boardwalk, mentioned there’s lots of selection for renters, which he known as excellent news.
“A secure, reasonably priced housing market is nice for a rising financial system,” mentioned the actual property government, who thinks it’s time for the federal government to ease immigration coverage. “There are greater than sufficient flats to let good, eager worldwide college students again. It’s going to assist our college budgets, and it’ll assist our financial system.”
As for REIT valuations, he wonders how lengthy public entities can proceed buying and selling when personal traders will purchase them out and worth them increased.
Kolias and others suppose that whereas market situations are creating extra provide, these days could also be short-lived. Rising prices and shrinking demand are driving away new building, and there are few assurances that future market situations will proceed to favour renters.
New apartment gross sales within the Larger Toronto Space dropped to their lowest stage since 1991 within the final quarter of 2025, and analysis agency Urbanation famous a record-breaking 28 initiatives have been cancelled final yr, developments that might have added 7,243 items in Canada’s largest metropolis.
A big proportion of condos are owned by traders and find yourself within the rental market, so the availability will decelerate. And whereas some apartment initiatives have been transformed to leases, the market will probably see fewer such conversions.
“By 2029, nearly no new condos are anticipated to be delivered,” mentioned Urbanation.
Leases.ca’s Ladas mentioned that as asking rents proceed to drop, an increasing number of renters on the condo continuum will see a chance to get a less expensive place and probably transfer.
That’s an awesome story for renters in 2026 — however don’t count on it to final a lot past that.
• E mail: gmarr@postmedia.com
