Purpose-Built Rentals Hold Strong While Condo Rents Dip in Early 2025

🖊️ By Joanna Gerber
📅 April 25, 2025

As we moved into spring 2025, Canada’s purpose-built rental market 🌱 began to regain momentum, offering a reassuring sign of stability after several slower months. In March, average asking rents ticked upward, reversing a slide that had persisted since fall 2024. While year-over-year numbers are still a touch softer, purpose-built rentals continue to outshine the condominium rental market, showcasing stronger long-term resilience.

📊 Market Snapshot: March 2025

According to the latest Rentals.ca report:

➡️ Average asking rents increased 1.5% month-over-month to $2,119, marking the first rise since September 2024.
➡️ However, rents were still 1.5% lower than March 2024, highlighting ongoing affordability challenges and an influx of new units.

Purpose-Built Rentals: The Steadier Option 🚀

• 🛌 3-bedroom apartments led the way, rising 3.7% year-over-year to $2,711.

• 🏠 Studio units also climbed 1.8% y/y to $1,593.

• 🏢 1-bedroom and 2-bedroom units saw small dips, down 2.2% to $1,883 and $2,280, respectively.

➡️ Why the mixed results? Larger units are in higher demand among families and multi-generational households 👨‍👩‍👧‍👦, while the 1- and 2-bedroom segment remains more competitive due to a larger existing supply.

Condo Rentals: Feeling the Pressure 📉

In contrast, the condo rental market continued to soften:

• 🏘️ 2-bedroom condos: Down 4.3% y/y to $2,374.

• 🏙️ 1-bedroom condos: Dropped 3.7% y/y to $2,032.

• 📉 Overall condo rents fell 3.8% year-over-year to $2,232.

Condos often see sharper fluctuations because they’re typically owned by individual investors, not managed by large-scale landlords. This makes them more vulnerable to market swings and policy changes. Plus, purpose-built rentals often offer added perks like on-site management, longer lease terms, and predictable rent increases—features tenants increasingly value in today’s market 🔑.

Long-Term Perspective 🔍

Despite recent shifts, purpose-built rentals have surged since the pandemic:

• 🔥 +35.5% average rent growth since March 2020.

• 🏡 3-bedroom units: Up 39.6%.

• 🏠 2-bedroom units: Up 38.4%.

Compare that to condos, which have seen just +0.6% rent growth over the same period. 🚨 That’s a clear sign that purpose-built rentals remain a solid investment and living option in today’s evolving market.

💬 Thinking of investing in a rental property, or looking for your next home in Eastern Ontario? Let's chat! I’m here to help you navigate the latest market trends and find the right fit.

📞 Call me at 613 551 2866
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