TORONTO — Average asking rents across Canada hit an 18-month low in January, declining 4.4 per cent on an annual basis to $2,100.

A monthly report by Rentals.ca and Urbanation, which analyzes listings in the former’s network, says it marks the fourth straight month of annual rent declines after 38 consecutive increases.

The report says that despite those declines, average rents in Canada are still 5.2 per cent higher than two years earlier and 16.4 per cent higher than three years ago.

Urbanation president Shaun Hildebrand says more rent declines are likely in the months ahead because of heightened economic risks, Canada’s immigration target cuts, and multi-decade highs for apartment completions.

The report says much of the latest decline was concentrated in the secondary rental market, where asking rents for condominium apartments fell 6.5 per cent to an average of $2,219, while rents for houses and townhomes declined 8.9 per cent to $2,144.

Greater Toronto real estate’s bad year ended even worse. Altus Group data showed Greater Toronto Area (GTA) developers saw demand slip further in December, as new home buyer incentives failed to stimulate new demand. As a result, the market accumulated the most year-end inventory in nearly a decade—nearly 2.5x the amount available in 2021’s tight market, but that isn’t the banger. Last year the market saw the fewest new home sales since 1990, when Toronto’s last real estate bubble popped.

Greater Toronto developers wrapped up the year with the worst sales in decades. Just 9,816 new homes sold in 2024, down 47.3% from the previous year and 69% below the 10-year average. Sales haven’t been this weak since 1990, a year which previously marked the start of an extended downturn for the region.

Emerging Trends in Real Estate is an annual real estate report published jointly by PwC (Price, Waterhouse and Cooper) and the Urban Land Insitute (ULI).

The report is compiled by inviting real estate watchers and investors from more than 150 countries, including 63 respondents from Canada, to participate in a survey and interviews to identify the trends and forecasts in real estate, including investment and development trends, real estate finance and capital markets, in North America.

Based on responses, the new report, Emerging Trends in Real Estate 2025, shines a light on the City of Calgary as being a rising star in the real estate investment universe.

Uncertainty surrounding Canada’s trade relationship with the United States is expected to cloud economic decision making by businesses and households for months, economists are warning, with the outcome of a looming review of the Canada-U.S.-Mexico Agreement (CUSMA) trade deal one of many unknowns.

Though Canada secured a 30-day reprieve from immediate U.S. tariffs on Monday, Bank of Nova Scotia economist Derek Holt is among those who aren’t ready to breathe a sigh of relief.

Holt noted the language used by U.S. President Donald Trump, who said it was his intention to see whether “a final economic deal with Canada can be structured” while tariffs are paused.

Traders of Canadian short-term interest rates have begun to price in meaningful odds of an emergency cut by the Bank of Canada to blunt the economic impact of tariffs the United States said will take effect Tuesday.

While a one-month reprieve for Mexico from U.S. tariffs on Monday led to a partial reversal in anticipation Canada also may avoid them, interest-rate swaps linked to the Canadian overnight repo rate average, or CORRA, sustained steep declines. At the same time, Canada’s two-year yield plummeted, reaching levels nearly 180 basis points lower than its U.S. counterpart, the widest margin since 1997.

In our February 8, 2024, News ReLease, we reported on The Canada Life Assurance Company et al. v Aphria Inc. (“Aphria”). In that case, the tenant wanted out of its lease and purported to “repudiate”, in an attempt to force the landlord to take the (office) space to market. The landlord took the position that it had no obligation to accept the tenant’s repudiation or look for a replacement tenant, and that the tenant was required to pay rent over the balance of the term.

According to one of the most important Court rulings in the field of commercial property leasing (the Supreme Court of Canada’s 1971 decision in Highway Properties Ltd. v Kelly, Douglas and Co. Ltd. (“Highway Properties”)), a landlord has 4 options when its tenant fundamentally breaches a commercial lease. One of those options is to keep the lease alive (or “affirm” the lease) and sue for rent over the balance of the term on the basis that the lease remains in force. The Courts have consistently held that when a landlord elects this option, it has no obligation to mitigate.

Toronto area condos may have lost their once-alluring sheen for prospective homeowners (especially investors), but another segment of the city’s real estate market is still seeing growing demand.

Defying the persistent trend of subdued buying that has swept the region during the last year-plus, an increasing number of townhomes are changing hands, making it the hottest property type on the GTA residential market as of December 2024.

Multiple reports on the state of things say as much, including one from industry data firm Zonda Urban, released on Thursday.

A looming trade war with the United States could be “problematic” for Canada’s housing market, industry experts warn, potentially driving up construction and renovation costs on both sides of the border.

The U.S. and Canada are each other’s top trading partners and exchange homebuilding materials worth billions of dollars each year.

Homebuilders are bracing for the impact of a trade war if U.S. President Donald Trump pulls the trigger on Feb. 1 with a 25 per cent tariff on Canadian goods. Prime Minister Justin Trudeau has said he supports the “principle of dollar-for-dollar matching tariffs” if Trump follows through on his threat.