TORONTO — Average asking rents across Canada dropped four per cent in July compared to last year, landing at $2,037, according to a new national report. This marks the 22nd consecutive month of year-over-year declines, even though the pace of the drop is finally slowing down. The findings come from the latest monthly analysis by Rentals.ca and Urbanation, which tracks pricing trends in cities nationwide.

Over the past two years, asking rents have fallen a total of 7.5 per cent. However, July’s annual decrease was the smallest since February, signaling a possible shift in momentum. Meanwhile, prices continue climbing on a month-to-month basis, which is worth watching closely.

Rent prices rose 0.2 per cent from June, marking the fourth straight monthly increase. Consequently, experts are cautiously optimistic, though they stop short of calling it a full recovery.

National Rent Trends: Fourth Consecutive Monthly Rise

“Canada’s rental market is showing signs of stabilizing, but not yet recovering,” said Urbanation president Shaun Hildebrand in a news release. According to Hildebrand, this pattern reflects normal seasonal behavior rather than a dramatic turnaround.

“While rents have risen for four straight months, this is typical seasonal momentum heading into the back-to-school period, with annual declines persisting across most of the country,” he explained. In other words, students returning to campuses often drive short-term demand spikes. Still, most cities continue to post annual losses.

Therefore, the broader picture remains mixed. On one hand, monthly gains suggest renewed demand. On the other hand, most markets are still cheaper than they were a year ago.

Toronto’s Rental Market: A Potential Turning Point

Toronto stands out this month. Hildebrand called it “worth watching as a potential leading indicator” for the rest of the country. Apartment and condo rents there rose 1.6 per cent from June, reaching $2,577.

Furthermore, Toronto’s year-over-year decline was just 0.6 per cent — the smallest annual drop among Canada’s major markets. This suggests the rental market in the city may be nearing a bottom. As a result, analysts are paying close attention to what happens next.

The report noted that this shift “marks a further step towards an emerging turnaround in Toronto’s rental market after more than two years of annual declines, with supply tightening as fewer new condo units come to market and pent-up demand being released as the market becomes more affordable.” Consequently, tighter supply combined with improved affordability appears to be reshaping demand.

City-by-City Breakdown: Vancouver, Calgary, Edmonton, Ottawa and Montreal

Vancouver remains the most expensive municipal market in Canada. Average asking rent for apartments and condos there sits at $2,677, down 4.5 per cent year-over-year and 1.4 per cent from June. Despite the decline, affordability challenges persist in the city.

Calgary also saw a notable annual drop of 4.5 per cent, bringing average rent down to $1,828. Similarly, Edmonton posted a 3.6 per cent decrease, landing at $1,509. These prairie markets continue adjusting after previous periods of rapid growth.

Meanwhile, Ottawa’s average asking rents fell 2.4 per cent to $2,145. Montreal saw a smaller dip of 1.6 per cent, with average prices reaching $1,940. Overall, every major city recorded annual declines, though the magnitude varied significantly.

Nationally, purpose-built apartment rents fell 2.6 per cent year-over-year to $2,041. In contrast, condominium apartment rents dropped more sharply — down 6.3 per cent to $2,063. This gap highlights differing investor and renter behavior across housing types.

Secondary market units, including houses and townhouses, experienced the steepest annual decline of all categories. Prices there fell 7.5 per cent, averaging $2,007. Consequently, this segment appears most sensitive to shifting demand and affordability pressures.

What This Means Going Forward

Overall, July’s report paints a picture of a market in transition. Rents are still falling annually, yet monthly gains hint at stabilizing demand. Meanwhile, cities like Toronto could offer early clues about where the national trend heads next.

As back-to-school season approaches, seasonal demand may keep pushing monthly numbers upward. However, whether this translates into a genuine year-over-year recovery remains uncertain. For now, Hildebrand’s assessment holds: the market is stabilizing, but not yet recovering.