Column
Analysis of the CMHC 2025 Rental Market Report
Jean Giguère
Author :
WikiResidence
Source :
12/22/25
Montreal Paradox 2025: The rental market eases, but the bill keeps climbing.
Against all odds, the 2025 CMHC report reveals a significant easing of the rental market in the Greater Montreal area, with the vacancy rate rising back to 2.9%, brushing against the threshold of a balanced market.
This breath of fresh air, caused by a slowdown in temporary immigration and a record number of new housing deliveries, has not, however, translated into savings for tenants.
On the contrary: average rent jumped by 7.2%, a hike fueled no longer by scarcity, but by historic adjustments to existing leases.
An Unexpected Trend Reversal
Observers expecting the vacancy rate to plunge below the 1% mark this year will have to revise their analyses.
The 2025 CMHC Rental Market Report paints a picture of a market in deep transition.
For the second consecutive year, housing availability has increased, offering a statistical reprieve to the metropolis. However, behind these encouraging figures lies a financial reality that is becoming increasingly burdensome for Montreal households.
1. The 2025 Official Figures
Here is the confirmed data for the Montreal CMA:
Vacancy Rate (Traditional/Purpose-built rental): 2.9% (Rising). We are approaching the 3% threshold considered a balanced market.
Average Rent (2-bedroom): $1,346.
Annual Rent Increase: + 7.2%.
Condominium Rental Market: Vacancy rate of 2.1% with an average rent of $1,826.
2. Why is the market emptying out? (Supply and Demand)
Two major factors explain this surprising rise in the vacancy rate:
A. The Slowdown in Demographic Demand
The report notes a net decline in demand in key sectors such as Downtown and Notre-Dame-de-Grâce.
This phenomenon is directly linked to federal and provincial policy: the decrease in non-permanent residents.
Fewer international student enrollments (despite an overall increase in students) and anemic growth in temporary workers have reduced pressure on the rental stock.
B. The Massive Arrival of New Housing (Supply)
Record housing starts from previous years are finally bearing fruit.
A significant volume of projects reached the completion stage in 2025, particularly on the Island of Montreal and the South Shore.
The market is effectively flooded with new units.
3. Economic Analysis: The "7.2% Paradox"
This is where the analysis must be nuanced for your readers.
How can rents rise by 7.2% if apartments are easier to find?
Usually, rent increases are dictated by scarcity (turnover rents). In 2025, the dynamic has reversed.
The increase is mainly attributable to units where tenants are not changing.
The TAL Effect: The Administrative Housing Tribunal (TAL) issued a record adjustment recommendation of 5.9% this year.
Landlords, facing exploding operating costs (insurance, taxes, mortgage rates), applied these hikes to renewed leases.
Tenant Stagnation: With a rising unemployment rate and economic uncertainty, fewer tenants moved (lower turnover).
They preferred to absorb the increase in their current rent rather than risk looking elsewhere.
4. Social Impact and Budgets: A Two-Speed Market
The market easing (2.9%) is uneven.
Luxury on Sale: New, expensive units are struggling to find takers. Landlords of these buildings must now offer incentives (free months, promotions) to attract tenants.
Affordable Housing Nowhere to be Found: The report highlights that affordable units remain scarce.
The high vacancy rate is inflated by expensive new units sitting empty.
For the middle class and low-income households, the "crisis" remains very real, as affordable stock is not becoming available.
📊 Dashboard: The Montreal Rental Market (2024-2025)
This table summarizes the key indicators from the latest CMHC report for the Montreal Metropolitan Area.
Key Indicator | 2025 Data | Trend / Variation | 2024 Context (Estimated) |
Vacancy Rate (Rental) | 2.9% | 📈 Rising | Tighter market last year |
Avg. Rent (2-bedroom) | $1,346 | 🔺 + 7.2% | ~ $1,255 |
Vacancy Rate (Condo) | 2.1% | ➡️ Stable / Easing | Increased availability |
Avg. Rent (Condo 2-bed) | $1,826 | 💲 +35% Premium | Significant gap vs. traditional rental |
Note: While the vacancy rate approaches equilibrium (3%), rents continue to climb well beyond inflation.
The price gap between a standard rental apartment ($1,346) and a rented condo ($1,826) remains marked, forcing many tenants to remain in the aging housing stock.
The Montreal rental market of 2025 is a correction market.
Physical supply (concrete) has caught up with some of the backlog, aided by a drop in temporary demand.
However, the financial offering (price) continues to drift away from Montrealers' ability to pay. Availability is increasing, but affordability is decreasing.
If these figures seem surprising compared to the headlines of past years, it is because they reflect the inertia of the real estate sector.
Construction projects started 3 years ago are finishing now (creating supply), at the exact moment temporary immigration is slowing (lowering demand).
This is the classic definition of a real estate cycle entering a stabilization phase, albeit a painful one for the wallets of existing tenants.