Owning a piece of real estate remains out of reach for many Canadians and newcomers. According to the Canadian Real Estate Association (CREA), residential sales across Canada were flat in March 2026 due to global economic uncertainty and higher mortgage rates.
With the Bank of Canada’s policy rate remaining at 2.25% (as of April 2026), not everyone qualifies for affordable lending rates. As such, many people rely on the rental market instead of going down the route of pursuing homeownership. Some are even looking to become permanent renters, but those on the fence can use a Desjardins checklist to decide whether to rent or buy.
With the average rent prices going down due to a large supply, it’s easier for people to find apartments for rent. As of April 2026, Rentals.ca reports that the national average rent was $2,008, a 5.3% year-over-year decrease. Here, we’ll explain why rent prices have dropped, where rent prices are headed, and share tips on how to negotiate a rent reduction.
Why rent prices have fallen
There are several reasons why rent prices have gone down. The first reason is that the Canadian economy is growing slowly. Also, the federal government has cut immigration levels (including international students and foreign workers) to ease housing and public services. On top of that, more new units are coming to market this year, adding to the already large inventory.
Usually, during the summer months, demand for rentals increases, driving up prices. However, last summer we saw the opposite happen. One of the main factors is the growing supply in the market. In particular, new purpose-built rentals and condo units flooded the market. So renters have enjoyed the wide selection available and could look into better amenities.
According to the CMHC’s 2025 Rental Market Report, the average 2-bedroom rent for a condo apartment was $2,305, whereas the average 2-bedroom rent in the purpose-built rental market was $1,550. Furthermore, the average vacancy rate for a purpose-build rental apartments rose to 3.1 percent, up from 2.2 percent in 2024. In cities like Toronto and Vancouver, there was increased competition in the condominium market apartments rentals because of low residential sales.
Will rent prices drop even further?
Last year, rent prices fell across major cities in Canada due to increased supply and decreased demand. Going forward, we may start to see rent prices gradually rise over the next several years as market conditions change. Like the stock market, the housing market goes through cycles. Renters have had a lot of choice and could find a good deal. However, the market conditions will eventually swing the other way, in favour of landlords, as supply begins to balance out.
For example, CMHC’s Housing Market Outlook for 2026 predicts that the average rent for a two-bedroom in Toronto in 2026 will be $2,090. For 2027, it’s forecast at $2,140, and in 2028, we may see it increase to $2,220.
According to the CMHC’s Ontario housing market report, weak rental demand is expected to keep overall housing starts near two-decade lows in 2026. Adding to that, Urbanation is projecting there will be little to no condo construction underway in the Greater Toronto Hamilton Area by 2029. Eventually, the supply levels will decrease since there will be no new builds coming into the market. So, those looking to rent in a metropolitan area like Toronto should enjoy these reduced rents and perks while it lasts.
How to negotiate rent with your landlord
If you’re looking to rent a place, here are three ways you can negotiate a rental agreement with your landlord:
- Research your local market rental rates so you understand what’s currently available and how it compares to the rent you’re paying. When you talk to your landlord about negotiating your rent, you can be informed of the average rental rates for comparable property types.
- Emphasize your good habits, such as being clean, quiet, and responsible with paying rent on time. You want to show that you’re a top tenant the landlord wants to continue renting to.
- If you’re looking to get a deal on your rent, you could offer in return a longer lease agreement. You also want to be kind and polite when negotiating with your landlord.
- Your landlord may choose to offer other incentives instead of reducing your rent payment. For example, landlords are offering discounted rent or parking for a few months, free internet, gift cards, and Aeroplan points.
- If you don’t get what you want, you have to be willing to walk away or come to a compromise.
Once you’ve moved in and find that you have issues that need to be escalated, you can contact the residential tenancy branch, which is known as the Landlord and Tenant Board in Ontario.
Subsidized housing
Another option is Housing Connections, an organization that manages the centralized waiting list for individuals seeking subsidized housing in Toronto. It’s a government program that is also known as rent-geared-to-income housing. It enables tenants to pay a reduced market rent that’s determined by their annual household income.
Finding a rental that fits your budget
In recent years, the housing supply has ballooned. Yet, the demand from renters has deflated. The economy has slowed, and immigration levels have declined. As a result, newer buildings have come to the market with enticing offers for potential renters. Landlords have had to be creative. Some have even considered renting their houses on Airbnb. Luckily, many renters have enjoyed lower rents and extra perks across Canada’s rental market.
Be sure to take the time to research so you understand your local market. Use negotiation strategies to agree on a rent price that works for both parties. Hopefully, you’ll soon be able to enjoy your new home.
Are you finding it challenging to keep up with monthly rent payments because you’re dealing with debt? Our team at Debt.ca can offer you a free consultation.
