Population Revisions and Falling Rents: What the New Supply Story Means for Ontario Buyers and Landlords

What the revision changed

Earlier this year, Canada's population appeared to be shrinking. The latest numbers say it was not. Canadian Mortgage Trends reports that Statistics Canada raised its estimate by 301,008 people as of the second quarter of 2026, according to an analysis by Rentals.ca and Urbanation.

Population growth between the first quarters of 2025 and 2026 was revised from a 0.5% decline to a 0.5% increase. More than 90% of the adjustment came from non-permanent residents: Statistics Canada added immigration data on temporary residents who stayed while awaiting permit extensions, instead of counting them as departures when their permits expired.

The third-quarter 2025 estimate moved from a loss of 76,068 people to a gain of 114,941, and the fourth quarter now shows a decline of just 7,225, per the same analysis. City-level estimates have not been revised yet, which limits what can be said about individual markets.

Why rents fell anyway

Rentals.ca and Urbanation had attributed falling rents to both weaker population growth and a wave of new apartment completions. With most of the population decline now removed, they see supply as the more significant factor. Average asking rents have fallen 7.6% from their May 2024 peak despite continued population growth, they said.

Urbanation's Shaun Hildebrand said the revisions "settle any debate," arguing that building more housing improves affordability. That is the analysts' reading, and other economists may weigh the factors differently. The firms also cited CMHC vacancy data at multi-year highs across price ranges, with the largest increases among the most expensive units, which they say fits the idea that higher-income tenants move into new buildings and free up older, cheaper rentals.

The catch: the pipeline is thinning

The units that are cooling rents were started years ago. A survey commissioned by CMHC and conducted by EY suggests the next round is harder to build. Of 110 respondents, 72% said they had paused or cancelled projects in response to rising costs over the past two to three years. Others reported raising rents (54%), extending timelines (44%) or shrinking units (44%).

Government regulations, fees and approval delays ranked as the top barrier nationally and in every region. Respondents said faster, more predictable approvals would help most. Meanwhile 78% said they had secured funding for a new rental development in the past year, up from 75% in 2025, and CMHC-insured loans were the most-used source at 85%. The report cautions that the findings are directional indicators of sentiment, not a statistically representative sample.

Rentals.ca and Urbanation warned that fewer starts today could reduce supply later this decade, particularly if population growth picks up again.

What it means if you are deciding whether to buy

Softer rents change the arithmetic of renting versus buying, though not in a way anyone can project. We walked through the comparison in our rent-versus-buy piece. The short version: rent is one side of the ledger. The other side is your down payment, closing costs, carrying costs and how long you plan to stay.

• If you are a first-time buyer, softer rents give you more room to save, not a reason to rush or to wait. See the First Home Hub.
• If you are weighing a purchase, run both paths in the calculators with your own figures.
• If you are moving up or down, the Next Home Hub covers timing the two transactions.

What it means if you rent a unit out

For small landlords and anyone counting a suite toward qualifying, lower asking rents matter. Lenders that credit rental income generally look at what the unit can reasonably rent for, so a softer market can change how much income they count. We explained how this works in our secondary suite qualifying piece.

If a mortgage on a rental property is coming up for renewal, read how renewals work and do the math on your own cash flow before assuming last year's figures still hold.