Falling Rents Haven’t Eased Affordability for Many Canadian Renters

# Why falling rents aren't bringing relief to every tenant

Rents have eased across much of Canada, but the full affordability picture depends on incomes and household make-up. Analysis of thousands of rental applications between April 1 and June 30 by rental risk company SingleKey shows rent declines in big cities alongside worrying income drops in smaller markets and rising indicators of financial strain.

What the national numbers show

Even where rents fell, rent as a share of household income stayed substantial: rent represented 27.7% of household income in Vancouver and 27.4% in Toronto among applicants.

Where falling rents didn't help: incomes matter

In several smaller markets the income side of the equation changed markedly. Barrie, Ont., saw applicant household income fall 6.3% year over year, pushing rent to 31.5% of household income. Greater Sudbury recorded a 21.5% drop in household income and rent consumed 29.9% of income. Winnipeg's average rent was down 8.9% to $1,572, but household income among applicants fell 20.5%, leaving rent at about 29.5% of household income.

SingleKey's founder and CEO Viler Lika summarized the dynamic: "As rent prices have gone down in the past year, you'd expect that this would have solved the financial pressure for renters, but rent price is only half of the equation."

Household composition shifts affordability

Household structure alters how far rent declines go. Single renters are the most exposed: they spent an average of 40% of after-tax income on rent in SingleKey's sample. The national household average across applicants was 28.1%.

Shared living arrangements—dual-income families, roommates, or co-signers—can lower the rent share per person and change outcome measurements. That means headline rent declines can leave single renters substantially worse off even when average rents fall.

Other signs of financial strain

Debt indicators rose alongside these income shifts. SingleKey found national debt collections increased 18.4% year over year despite falling rents. Credit metrics varied by market: Medicine Hat applicants had an average credit score of 656 with collections reported for 24.1% and bankruptcies for 6.1% of applicants. By contrast, Toronto applicants averaged a credit score of 742 with collections at 5% and bankruptcies at 1%.

These differences suggest that lower asking rents do not automatically translate to improved financial stability for all renters. Income declines and credit strain mean some applicants remain squeezed.

Practical takeaway for readers

When assessing rental affordability, look at both rent and household income trends for the local market and the likely household composition for the unit. A falling average rent can mask rising financial pressure if incomes decline or if a renter is single and bears full housing costs alone. Credit and collection trends provide added context on how strained renter finances are in a given market.