Canadian Rents Fall as Immigration Growth Slows

Canada's average asking rent fell to $2,034 in September 2026, extending a two-year decline as slower population growth and increased rental housing construction eased pressure on the market. Data released by Rentals.ca showed that national asking rents dropped 4.2% from a year earlier, bringing prices close to their levels in fall 2022.

The decline marked the 24th consecutive month of lower year-over-year asking rents, according to Rentals.ca. National rents previously peaked at $2,202 per month in spring 2024 after rising sharply during the years following the COVID-19 pandemic.

Rental prices began declining around the time the federal government announced immigration reductions in October 2024. However, recent revisions to population estimates have led analysts to reassess how much those policy changes contributed to the cooling market.

Rentals.ca previously identified increased housing supply as one factor behind falling rents, with completions of purpose-built rental properties reaching record highs. The report also cautioned that slower population growth remained relevant to understanding changes in demand.

Earlier, the federal government described its policy rationale in an October 2024 backgrounder, stating that "reducing the volume of immigrants will help to alleviate some pressure in the housing markets."

Canada's population increased by 2.8 million between 2022 and 2025, driven almost entirely by growth in permanent and non-permanent immigration, according to the source report. The federal government announced its intention to reduce immigration in October 2024, following an unprecedented period of migration growth.

Economic forecasts at the time anticipated that lower numbers of temporary residents would reduce demand for rental housing, particularly near colleges and universities that had experienced declining vacancy rates amid rising international student enrollment.

In a November 2024 report, RBC analyst Robert Hogue wrote, "We expect any net outflow of non-permanent residents will shrink rental demand in the near term — especially in areas close to post-secondary education institutions where ballooning international student enrolment crushed vacancy rates,".

Hogue's analysis focused on the potential effects of temporary resident departures on rental demand. A separate report from TD Bank, published about a year before the latest figures, also connected immigration trends with changing rental prices across Canadian cities.

The TD Bank report stated, "Reduced immigration has moderated demand for purpose-built rentals and, consequently, rent growth," noting that cities experiencing larger migrant departures were also seeing faster rent declines.

Statistics Canada subsequently revised its preliminary population estimates for 2025 after determining that it had overestimated the number of foreign residents leaving the country. The agency's initial estimate indicated that the population had declined by approximately 100,000, but revised figures showed an increase of 280,000.

Despite the revision, Canada's population growth rate for 2025 remained historically low at 0.5%. The updated figures indicated that the country had more temporary residents than previously estimated.

In a September 28 assessment of the revised data, Rentals.ca analysts concluded that the effect of immigration reductions on rents might have been smaller than their earlier analysis suggested. They wrote, "The elimination of population decline in the revisions indicates that new supply has been a more important factor than previously believed,".

The revised estimates shifted greater attention toward rental construction as an explanation for falling prices. The data did not eliminate the potential role of immigration changes, but they altered the relative importance analysts assigned to population trends and new housing supply.

Despite the recent decline, rental costs remain substantially above their pre-surge levels. Rentals.ca data show that average monthly rent was $1,662 in April 2021, nearly $400 below the September 2026 average after two years of annual declines.

A Bank of Canada essay published in September 2026 also examined the relationship between population growth and housing costs. Author Benjamin Straus identified "strong population growth" as a principal factor in the increase in rents following 2021.

Straus explained the underlying relationship between household demand and available housing, writing, "If the number of renter households increases faster than the supply of rental units, asking rents tend to rise,".

The national figures therefore reflect changes in both the number of households seeking rental accommodation and the supply of available units. The September average remained below its 2024 peak but above the level recorded in spring 2021.