Sydney Anderson

This Rental Market Update report provides an update on rental market conditions across Canada building on insights from our 2024 Rental Market Report, using alternative data sources. It also includes insights obtained through market intelligence from industry experts. Highlights Since October 2024, advertised rents are declining due to increased supply, while rents for occupied dwellings continue to rise at a slower pace than a year ago. Sluggish job markets and decelerating migration are creating challenging environments for landlords and property managers. Purpose-built rental supply is growing. CMHC construction financing programs and products supported an estimated 88% of Canadas new purpose-built rental apartment starts in 2024. Vacancy rates are expected to rise in most major markets this year. Despite easing rent growth and increasing supply, rental affordability isnt improving especially in Vancouver and Toronto as turnover rents are driving increases. Calgary, however, has shown a slight improvement. https://www.cmhc-schl.gc.ca/observer/2025/2025-mid-year-rental-market-update

From Scotiabank HIGHLIGHTS Nearly all Canadian provinces are poised for slowdowns in 2025. While the Canadian economy started the year with solid momentum, growth is expected to decelerate over the course of the year in the wake of the U.S. trade war and changes to Canadian immigration policy. Rising unemployment and lower population growth will weigh on consumption growth, and housing market activity has slowed as households delay major purchases. Exports are likely to decline due to the tariffs and spillovers from slower U.S. growth. We expect growth in central Canada to underperform the national average, given these provinces higher exposure to trade risks. While we continue to think a recession will be avoided, there is a high degree of uncertainty as to how the tariffs will ultimately impact the economyin addition to the possibility of new tariffs. Policy measures from the federal and provincial governments could provide a boost to economic activity, especially over the medium-term. That said, the tariffs and impact of elevated uncertainty are likely to weigh on growth in all regions of the country in the near-term, and compound the effects of sharply reduced population growth. Household spending growth is likely to slow. Household consumption started the year with strong momentum, aided by 225 basis points of interest rate cuts by the Bank of Canada between June 2024 and March 2025. Despite the tariffs and uncertainty that emerged early this year, retail sales in Q1 were solid again in aggregate, though this was to some extent driven by vehicle sales being pulled forward to March to avoid tariffs coming into effect in April, and indicated weakness in the most tariff-exposed economies of Ontario and Quebec. April and May data indicate that vehicle sales are slowing in Q2 and we expect this to continue throughout the year. In addition, drag from mortgage resets at higher interest rates is likely to continue, as we expect the Bank of Canada to hold off on further rate cuts until next year. The housing market has softened. Sales of existing homes slowed after the onset of the trade war in some provincesespecially the most expensive markets of B.C. and Ontario. However, housing market activity in the provinces east of Ontario has been remarkably resilient. New housing starts in B.C. and Ontario continue to trend lower, but residential construction contributed positively to growth in Q1 in most provinces, especially Saskatchewan. Abating economic uncertainty would release pent-up demand, especially in Ontario and B.C., where current sales rates remain below fundamental levels and new housing starts have been trending lower for some time. Falling interest rates would provide a further tailwind to residential activity, as will new government initiatives to support housing construction. That said, lower immigration will reduce some demand for housing, especially in the largest cities, which have long seen more than their fair share of newcomers to Canada. Additionally, the federal government has removed the GST first-time home buyers of new homes valued up to $1 mn, and reduced the GST on new homes between $11.5 mn for first-time home buyers. This policy will add to housing demand, however other factors such as tariff uncertainty and softer labour markets are likely to dominate in the near-term. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.the-provinces.scotiabank-s-provincial-outlook--june-27--2025-.html