Canadian asking rents fall 4.2% as condo units absorb most of the decline

For the second year in a row, the rent on a newly listed unit in Canada costs less than it did twelve months earlier. That is a real shift after the run-up between 2022 and 2024, when rents climbed faster than most incomes could keep up with. It helps to look at where the drop is happening, because it is not spread evenly.

Why condos are taking the biggest hit

Condo rentals are seeing the steepest declines, well ahead of purpose-built apartments and townhomes. The reason is mostly about who owns them.

A purpose-built rental building is owned by one company that plans to rent every unit for years. A condo rental is usually owned by an individual investor, often someone who bought before construction and expected to sell or rent at a higher price. When those buildings were finished, many owners found two problems at once. The resale market was slow, so selling wasn't attractive. Brand-new rental buildings with gyms, in-suite laundry and professional management were opening nearby.

So a lot of units that were meant to be sold ended up on the rental market instead. Analysts call this "shadow supply," meaning rental units that don't show up in counts of purpose-built rentals but still compete for the same tenants. An individual owner with a mortgage payment due each month will usually lower the rent before letting a unit sit empty. That is where much of the 4.2% comes from.

The pace is starting to settle in Toronto and Vancouver as the wave of new completions slows. CMHC also notes that even after two years of declines, rents in most large cities remain well above where they were before 2022.

What the number does and doesn't cover

The 4.2% figure applies to asking rents, the price on new listings. If you are renewing a lease, your rent is set by your landlord and your agreement, not by the market average. In Alberta there is no rent control, but a landlord can only raise rent once every 12 months and must give proper written notice. A national drop in listing prices doesn't lower an existing rent on its own. It mostly gives you a better sense of what you could pay if you moved.

How Edmonton fits in

Edmonton has not followed the national trend. While rents fell elsewhere, Edmonton has been roughly flat to slightly up, helped by people moving here from Ontario and B.C. The fast double-digit increases of 2024 and 2025 have levelled off, though. Alberta finished a near-record number of homes in 2025, and that supply is now catching up with demand. More units are still under construction and expected to open late in 2026, which could put more downward pressure on rents.

You can see the change on the ground. Some newer Edmonton buildings are offering incentives like a month of free rent, which was hard to imagine during the bidding wars of a few years ago. Older suburban walk-ups are feeling more pressure than well-located downtown buildings or higher-end units.

What this means depending on where you stand

First-time buyers who are renting have a bit more room to negotiate on lease terms or move-in incentives, which can help them save toward a down payment. Comparing renting with buying is worth doing again with today's numbers rather than the ones from 2024.

Move-up buyers thinking of keeping their first home as a rental should plan for gaps between tenants. A reasonable working assumption is a vacancy allowance of around 3 to 5% of yearly rent, rather than counting on one tenant moving out and the next moving in the same day. If the numbers only work with zero vacancy and steady increases, that is worth knowing before you commit.

Investors are looking at a market where yearly rent increases can't be assumed. In Edmonton, a unit that shows well, is priced to its neighbourhood and is managed responsively will hold tenants longer than one that relies on a tight market to fill it. Condos face the most direct competition from new purpose-built buildings, so they need the most careful look at what renters can get down the street.