Canada’s Rent Decline Is Accelerating: What Ottawa Property Owners Should Know in 2026

Canada’s rental market has entered a new phase. After several years of rapid rent growth, tight vacancy, and strong demand from population growth, asking rents are now moving in the opposite direction across many major Canadian markets.

According to the latest National Rent Report from Rentals.ca and Urbanation, the average asking rent for all residential property types in Canada fell 5.3% year-over-year in March 2026 to $2,008, the sharpest annual decline since the COVID-19 period. That marked the 18th consecutive month of annual rent decreases and brought national asking rents to their lowest level in 35 months. By April, the national average asking rent had moved slightly higher to $2,027, but was still down 4.7% year-over-year, extending the streak of annual declines to 19 months.

For Ottawa landlords, this does not mean the rental market has collapsed. It does mean pricing, presentation, tenant selection, and property management discipline matter more than they did during the peak market years.

Why are rents falling?

The rental market is being shaped by a rare combination of softer demand and rising supply.

First, Canada’s population growth has slowed sharply. Statistics Canada’s preliminary estimates show the country’s population decreased by 103,504 people, or 0.2%, between October 1, 2025 and January 1, 2026. Over that same quarter, the number of non-permanent residents in Canada decreased by 171,296, with declines recorded across all provinces and Yukon.

That matters because temporary residents, including many international students and work permit holders, are more likely to rent than buy. RBC Economics noted that reduced temporary resident inflows are expected to weigh especially heavily on Ontario and British Columbia, two provinces that have historically absorbed a large share of new temporary residents.

Second, renters are facing more economic uncertainty. Statistics Canada reported that Canada’s unemployment rate was 6.7% in March 2026, with youth unemployment at 13.8%. Among people who were unemployed in February, only 15.2% found work in March, below the comparable pre-pandemic average of 19.1%, suggesting slower hiring rather than a spike in layoffs.

Third, new rental supply is entering the market. CMHC reported that Canada’s 2025 housing starts rose 6%, driven by record rental construction and more “missing middle” housing. It also noted that high completion levels added important supply, particularly in markets such as Vancouver, Calgary, and Edmonton.

CMHC’s 2025 rental market analysis also found that the national purpose-built rental vacancy rate climbed to 3.1%, above the 10-year average, as record-high rental completions, slower population growth, fewer international students, and softer youth employment increased competition among landlords.

Not all rental properties are being affected equally

One of the most important takeaways for landlords is that the decline is not evenly distributed.

In March 2026, purpose-built rental apartments were the most stable segment, with asking rents down 3.9% year-over-year to an average of $2,005. Condo rents fell more sharply, down 6.9% to $2,077, while houses and townhomes saw the steepest drop, down 9.0% to $1,990. One-bedroom units recorded the largest decline by bedroom type, falling 5.1% to $1,763, while three-bedroom rents were down 3.8% to $2,452.

This reflects a practical reality: smaller units are often more sensitive to changes in student demand, immigration flows, and household formation. Larger units can remain more resilient because families and shared households still have fewer suitable options, especially in established neighbourhoods. RBC Economics has also noted that larger rental units have not experienced the same level of softness as smaller ones because many individuals and families are renting for longer and competing for a limited pool of larger homes.

What this means for the Ottawa rental market

Ottawa is not immune to the national trend, but it has its own local dynamics.

In the March data, Rentals.ca and Urbanation reported that three-bedroom apartment rents increased year-over-year in Ottawa by 3.0% to $2,763, even as most apartment rents declined across Canada’s six largest markets.

However, the April data showed softer conditions for smaller Ottawa units. A Canadian Press report published by CityNews Ottawa noted that one-bedroom apartment rents in Ottawa were down 3.2% year-over-year to $1,945, while two-bedroom apartment rents fell 4.0% year-over-year to $2,472.

For landlords, the lesson is not simply “lower the rent.” The better lesson is “price with precision.” A well-maintained three-bedroom home in the right neighbourhood may perform very differently from a one-bedroom condo competing with new supply. A professionally marketed property with strong photos, clear lease terms, responsive communication, and proper tenant screening will also perform differently from a listing that sits stale because it was priced based on last year’s peak expectations.

Asking rent is not the same as the rent tenants are already paying

It is also important to understand what these reports measure. Rentals.ca and Urbanation are tracking asking rents for available listings. That is different from the average rent paid by existing tenants.

RBC Economics explains that asking rent reflects advertised pricing for available units, making it more volatile and responsive to supply and demand. Average rent, by contrast, includes tenants who remain in place, where rent increases are often more gradual due to lease renewals, rent control rules, and landlord retention strategies.

For Ottawa property owners, this distinction matters. If your property is already leased to a good tenant at a sustainable rent, the national asking-rent decline may have limited immediate impact. But if your property is vacant, turning over, or coming to market soon, the current asking-rent environment should directly inform your pricing and leasing strategy.

How landlords should respond in a softer market

A softer rental market rewards preparation. Owners who take a disciplined approach can still protect returns while reducing vacancy risk.

The first step is to price based on today’s comparable listings, not last year’s market. Overpricing can create longer vacancy, and even a few empty weeks can erase the benefit of holding out for a slightly higher monthly rent.

The second step is to make the property easy to choose. Clean presentation, professional photos, accurate descriptions, flexible showing options, and fast follow-up all matter more when renters have more choice.

The third step is to focus on tenant quality. In a changing market, strong screening remains essential. A lower rent to secure a qualified, stable tenant may be better than chasing an unrealistic price and accepting avoidable risk later.

The fourth step is to think beyond rent alone. Preventive maintenance, clear communication, organized records, and reliable rent collection all help protect the long-term value of the property. Stewart Property Management’s Ottawa services are built around tenant placement, rent collection, maintenance coordination, inspections, reporting, and local oversight for owners who want a more hands-on management partner.

A more balanced market can still be a healthy market

Falling rents may sound concerning for landlords, but the broader picture is more balanced. The rental market is cooling after a period of unusually fast growth. That can create more choice for renters, more realistic pricing expectations, and a healthier long-term environment for responsible property owners.

For owners in Ottawa and the surrounding area, the opportunity is to adapt early. The right rent, the right tenant, and the right management process can make the difference between a property that struggles in a softer market and one that continues to perform with stability.

At Stewart PM, we help Ottawa landlords make informed rental decisions based on current market conditions, property-specific details, and long-term ownership goals. In a shifting market, good management is not just about filling a vacancy. It is about protecting your investment, supporting tenants, and positioning your property for the next phase of the rental cycle.