How Ontario’s Rental Scene Shifted in 2025

Canada’s rental market kicked off 2025 looking quite different from the last few years, which were marked by fierce competition, ultra-low vacancies, and rents that kept climbing.

But according to the latest Rental Market Report from Canada Mortgage and Housing Corporation (CMHC), a solid amount of new rental construction combined with weaker demand-thanks to slower population and economic growth-helped ease some of the pressure in big cities across the country.

Vacancy rates ticked up in nearly every major city, with the national vacancy rate for purpose-built rentals rising to 3.1 per cent – that’s up from 2.2 per cent last year and above what we’ve seen on average over the past decade. Still, affordability remains tough, especially for renters hunting for cheaper places.

Here’s a breakdown of how Ontario’s key rental markets shaped up in 2025 based on the report.

Greater Toronto Area

The GTA saw its rental market cool down noticeably at the start of this year. Matching CMHC’s predictions, vacancy rates for purpose-built rentals climbed to three per cent in the area, though rents still went up-the average price for a two-bedroom apartment increased by 3.5 per cent to $2,034.

This year saw rent growth slow down on smaller studio and one-bedroom places as condos flooded the market and ramped up competition.

The GTA’s condo apartment market had a vacancy rate around one per cent while average rent for two-bedrooms nudged up slightly to $2,904.

The report points out several reasons behind this cooling off in what used to be an extremely tight rental scene here-mainly fewer international migrants coming in (especially international students) plus a weaker economy overall.

Around university neighbourhoods actually experienced some of the biggest jumps in vacant units. Downsview-home to York University’s Keele campus and two colleges-saw its vacancy climb from just 0.7 per cent back in 2023 all the way up to 3.1 per cent this year.

Source: CMHC.

This year new rental buildings also struggled more than older ones when it came to filling units. Projects finished within three years showed vacancies close to seven per cent, and about three-quarters of these newer buildings offered incentives like one or two months free rent just to get tenants through the door.

Toronto also had one of Canada’s highest unemployment rates among major cities during 2025-especially affecting people aged between 15-24. Affordability stayed tight too; on average folks needed about 42 per cent of their after-tax income just to cover rent on an empty one-bedroom unit-and minimum wage earners had to spend about two-thirds of their take-home pay on a vacant studio place.

Hamilton

Hamilton saw its rental vacancy increase this year reaching 3.6 per cent – its highest since before COVID-19 – which was actually higher than CMHC expected. Much of this was due to fewer students renting near Mc Master University and Mohawk College campuses where many renters live.

The downtown area got hit with a wave of new condo completions too this year making it harder for newer purpose-built rentals compete.

The overall supply didn’t change much but Q3 showed almost record numbers under construction signaling “strong future growth.”

Renters here enjoyed more options later into spring and summer thanks mostly to extra availability hitting those quarters more than usual throughout the year.

Kitchener – Cambridge – Waterloo

This region held steady vacancy-wise compared with last year but saw shifts within sub-markets nearby major schools like University of Waterloo or Wilfrid Laurier University where federal limits on study permits cut down demand noticeably like elsewhere with big post-secondary presence across Ontario cities.

Kitchener – Cambridge – Waterloo also felt tariff impacts on its local economy heavily since many residents work manufacturing motor vehicles or parts industries – one reason why rents didn’t fall despite growing supply (which rose by almost three percent).

Even though renters had more choices overall most brand-new apartments remained pricey putting them out reach if you’re low income.

London

London reached levels not seen since at least 2010 for vacancy rates at four percent. The report pins that mostly on less immigration , slower economy , plus record-high additions coming online.

“Although we expected market conditions to ease , weaker-than-expected demand pushed the vacancy rate above our forecast ,” says CMHC.

Like other Ontario centres , London has leaned heavily historically on international student demand , yet steep drops over last couple years have raised empties considerably. Even so , supply grew by over two percent topping recent records with more than 2500 units completed Jan-Sept alone.Ottawa

The capital eased moderately this past year as well seeing purpose-built vacancies rise gently back toward three percent ; less international student interest along with local joblessness were part causes behind changes.

Vacancy hit six point seven percent among buildings built after twenty-fifteen indicating they struggled twice as hard filling as citywide averages suggested earlier.

Source: CMHC.

Certain neighbourhoods including Sandy Hill and Lowertown-which is known as university areas-had far more empty spots than other parts around town.

D despite softening trends lowest-priced units kept vacancies under one percent while higher-end rentals became easier find empty seats; meanwhile rent hikes slowed sharply ending at only three point four percent after nearly five last time around

The St. Catharines-Niagara area’s typical vacancy held steady near four percent again this yr mirroring results from ’24 ; Niagara Falls itself faced somewhat bigger emptiness due mainly dropping numbers among work permit holders plus an uptick supply increasing roughly two-percent alongside labour troubles related tariffs played role too

Averaged rent rose fifty-five cents percentage wise pushing typical two-bedroom prices closer toward fifteen hundred dollars mark finishing at $1,527

This city kept having relatively high vacancies remaining near four-percent level beating both provincial & national averages ; ongoing international student counts falling temporary foreign workers weakened demand even further

Main industries here such manufacturing & construction laid off folks due tariffs resulting migration away seeking stronger job markets such Alberta led Windsor having highest unemployment among metropolitan areas nationwide clocking ten point one % come October

Eversupply continued building out suburbs beachside zones Amherstburg North Essex County included

Purpose-built rentals posted vacancy rate same four% figure while average price tag for two bedrooms rose modestly hitting $1454 showing modest increase compared prior period(function(d, s, id){ var js, fjs = d. get Elements By Tag Name(s)[0]; if (d. get Element By Id(id)) {return;} js = d. create Element(s); js. id = id; js. src = “https://connect. facebook. net/en_US/sdk. js”; fjs. parent Node. insert Before(js, fjs); }(document, ‘script’, ‘facebook-jssdk’) ); ! function(f, b, e, v, n, t, s) {if(f. fbq)return; n=f. fbq=function(){n. call Method? n. call Method. apply(n, arguments): n. queue. push(arguments)}; if(! f._fbq)f._fbq=n; n. push=n; n. loaded=!0; n. version=’2.0′; n. queue=[]; t=b. create Element(e); t. async=!0; t. src=v; s=b. get Elements By Tag Name(e)[0]; s. parent Node. insert Before(t, s)}(window, document,’script’, ‘https://connect. facebook. net/en_US/fbevents. js’); fbq(‘track’, ‘Page View’);

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