Toronto – September 29, 2026 – Substantial revisions to Statistics Canada's population estimates, stretching back nearly five years to Q4 2021, indicate that new housing supply, rather than a declining population, is the primary force behind the softening of Canada's rental market, according to a new analysis from Rentals.ca and Urbanation. The revisions effectively erase what was previously reported as three consecutive quarters of population decline: the updated data show only a modest decline of 7,225 persons in Q4 2025, with Q3 2025 alone revised from -76,068 to +114,941.
"These revisions settle any debate. Building more housing improves affordability. The concern now is that the projects completing today were launched years ago under different economic realities. With rents falling and construction costs facing renewed upward pressure, developers are starting to pull back. If projects aren't viable to build at today's rents, the pipeline will slow just as population growth picks up again, leaving us with another shortage by the end of the decade," said Shaun Hildebrand, President of Urbanation.
The cumulative revision to Canada's population reached +301,008 as of Q2 2026, shifting year-over-year population growth from Q1 2025 to Q1 2026 from a reported -0.5% to +0.5%. More than 90% of the change, a revision of +275,942, came from net non-permanent residents, after Statistics Canada incorporated additional IRCC data that accounts for temporary residents with expired permits who remained in Canada while awaiting extension approval. These residents had previously been counted as departures at the moment their permit expired.
Previous data pointed to two forces pulling rents down: a shrinking population and a surge in new apartment completions. With population decline now largely revised away, the analysis finds that new supply, not weaker demand, has been the more significant driver, and that aggregate demand has likely held flat or even increased as improved affordability unlocks latent demand and new household formation. Average asking rents are down 7.6% from May 2024 despite population growth and more new rental completions. Higher-income renters absorbing new supply frees up existing units, a filtering effect supported by CMHC data showing multi-year vacancy highs across all price quartiles.
City-level population estimates have not yet been revised, but the same pattern is visible in 2024-2025 data comparing supply growth to population growth: cities where new supply significantly outpaced population growth saw larger decreases in asking rents, despite new builds typically entering the market at above-average price points.
The report warns that recent supply gains stem from projects launched years ago under higher demand forecasts. As rents drop, construction costs climb, and material costs like steel face tariff risks, developers are pulling back, driving down new starts—especially in condos. With population growth expected to rebound and new completions taking years, the analysis stresses that sustaining construction through faster permitting, zoning reform, tax rebates, and financing is vital to prevent a late-decade supply deficit.
For more information or to schedule a media interview, please contact media@rentals.ca. To read the entire analysis, visit the article on Rentals.ca.
Media Contacts:
Giacomo Ladas: giacomo@rentals.ca
Shaun Hildebrand: shaun@urbanation.ca
Shaun Hildebrand: shaun@urbanation.ca