Rents still dropping in Canada, with Scarborough and Ajax seeing biggest declines: report

Rents in Canada declined 4.7 per cent in May from a year ago – the 20th consecutive month of year-over-year drops – though the drop in asking rents was somewhat subdued in Ontario’s biggest markets.

Scarborough in east Toronto and Ajax in Durham Region proved to be outliers, with rents in Scarborough falling 9.9 per cent year-over-year for one-bedroom apartments, with Ajax right behind at 9.5 per cent.

The two communities – ranked 17th and 19th, respectively among 20 towns surveyed in the National Rent Report by Urbanation, saw far and away the biggest declines for one-bedroom units year-to-year. Ajax’s drop of 4.1 per cent was easily the biggest decline month-to-month.

Conversely, Ajax’s 2.2 per cent increase in two-bedroom units was second only to Kanata’s massive jump of 9.5 per cent, while the Durham town’s year-over-year increase of 3.9 per cent was second only to Kingston’s jump of 10.2 per cent.

North Vancouver maintained its position as the most expensive city to rent in Canada with an average asking price for all rental units at $2,297. Two-bedroom units in Vancouver’s northern suburb dropped a massive 7.7 per cent year-over-year to $3,302, slipping to second place behind Vancouver at $3,330.

Vancouver was second in total rent prices at $2,712, followed by Kanata ($2,543), North York ($2,520) and Toronto ($2,512). Coquitlam, Oakville, Burnaby, Etobicoke and Burlington rounded out the top ten.

Average asking rent in Canada is down $100 to $2,029 year-over-year while rents actually rose marginally (0.1 per cent) from April, well below the average seasonal increase for May during the previous five years of 1.3 per cent, indicating a slower than normal seasonal uptrend heading into the summer.

Since reaching a low of $1,662 in April 2021 during COVID, average rents have risen 22.1 per cent but have declined 7.8 per cent from the high of $2,202 in May 2024.

While national average asking rents have risen slightly in the short term over the past three months as Canada enters the peak spring and summer rental season, rents have continued to decline on a year-over-year basis.

Current economic indicators, including Canada falling into a technical recession as of Q1 2026, suggest that rents will continue to face headwinds into the second half of 2026 from waning demand from elevated youth unemployment, as well as changes to immigration policy.

The combination of new supply being completed in a market with receding demand has led to persistently declining rents and increased competition between property owners, particularly in the largest urban markets in the GTA, where the most common rental incentive offered by newly completed purpose-built rental apartment projects is now two months of free rent.