Population revisions point to new supply as bigger driver of falling rents

Revisions to Canada’s population estimates have largely erased last year’s reported declines, leading Rentals.ca and Urbanation to conclude that new supply played a bigger role in lowering rents than previously believed.

Statistics Canada raised its population 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.

“These revisions settle any debate. Building more housing improves affordability,” Urbanation president Shaun Hildebrand said.

More than 90% of the adjustment came from revisions to non-permanent resident estimates. StatCan incorporated additional immigration data accounting for temporary residents who remained in Canada while awaiting permit extensions, rather than counting them as departures when their permits expired.

The updated figures largely erase three previously reported quarters of population decline. The third-quarter 2025 estimate shifted from a loss of 76,068 people to a gain of 114,941, while the fourth quarter now shows a decline of just 7,225.

Rentals.ca and Urbanation had attributed falling rents to both weaker population growth and rising apartment completions. With much of the reported population decline removed, they now see supply as the more significant factor.

Average asking rents have fallen 7.6% from their May 2024 peak despite continued population growth, according to the analysis.

The firms said the findings also support “filtering,” whereby higher-income tenants occupy new units, freeing up older, less expensive rentals. They cited CMHC data showing vacancy rates at multi-year highs across all price ranges, with the largest increases among the most expensive units.

City-level population estimates have not yet been revised, limiting comparisons with rental supply in individual markets.

Construction pipeline begins to slow

“The projects completing today were launched years ago under different economic realities,” Hildebrand said.

Falling rents, rising construction costs and tariff-related pressure on materials such as steel are making new projects harder to finance, the firms said. Developers are already pulling back on starts, particularly in the condominium sector.

Because projects take years to complete, fewer starts today could reduce supply later this decade, particularly if population growth accelerates again, they warned.

The analysis called for faster permitting, zoning changes, tax rebates and financing measures to keep new projects viable.

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Last modified: September 29, 2026