RBC Elements™: Canadian Apartment Rent Tracker

Research evidence excerpt

RBC Elements™: Canadian Apartment Rent Tracker

Predicting YoY inflection in listed asking rents – a rough estimate

Base-effect calculation: The most powerful near-term predictor of when the YoY inflection occurs is a base-effect calculation. The

YoY print will turn positive when the current rent level exceeds the level from 12 months ago. Given that average listed rents

declined sequentially throughout much of 2025, the prior months become progressively easier comps. With some subsequent

months having seen modest uptick in rents, we could see YoY increase in rents even if rents flatten for the balance of the year.

Base-effect math suggests if the aggregate average rents stabilize at 0% MoM in H2/26 (our base case assumption for 2026),

the YoY growth could turn flat-to-modestly positive by early Q1/27. In a bull case scenario of +0.25% MoM in H2/26 and 2027,

the inflection could occur in Q4/26 and in a bear case scenario of -0.25% MoM in H2/26 and 0% in 2027, YoY growth will remain

negative until at least Q4/27.

The key upside risks to this timeline are (1) an earlier or larger rebound in immigration, (2) faster-than-expected decline in housing

completions, and (3) wage growth outpacing rent declines and restoring affordability. The key downside risks are (1) additional

supply entering the market from distressed condo investors, (2) continued policy-driven population decline through 2027, and (3)

recession reducing tenant demand.

Exhibit 1 - Base, bull, and bear case assumptions

Scenario MoM change YoY

inflection

Bull +25 bps H2/26 Q4/26

Base +0 bps H2/26 Q1/27

Bear -25 bps H2/26, +0 bps 2027 Q4/27

By market, under the base case scenario, Halifax, Edmonton, Montreal could potentially inflect as early as Q3-Q4/26, Calgary