Much of what CIBC deputy chief economist Benjamin Tal told the Canadian Apartment Investment Conference in Toronto on September 9 was sober. The next six months would stay difficult, he said. Tariffs and geopolitics are still clouding the outlook, long-term rates are unlikely to fall much, and the Bank of Canada has little room to cut.[1][2] One line deserves to be read on its own, though: the mortgage shock is over.[1]

Most coverage will treat that as good news for homeowners. For anyone who owns or finances Ontario rental housing, the more interesting effect falls on the people who rent.

How the shock reached renters

The renewal wave never stayed inside the homeowner's budget. As households who had locked in at pandemic-era rates renewed at much higher payments, they cut back across the board. Moves were delayed, upgrades postponed, and young adults stayed with parents or roommates longer. For a landlord, each of those decisions shows up as a household that never formed.

That helps explain why the rental market softened even while the structural shortage persisted. In August, national asking rents were down 4.8% from a year earlier, the 23rd straight monthly annual decline. Ontario was down 3.5%.[3] Some of that reflects new supply and fewer temporary residents. Some of it reflects households that were financially able to form but chose not to.

What "over" does and does not mean

Tal's point is about direction. The cohort facing the steepest payment resets has largely renewed, and the households renewing now face a smaller jump from a base that has already adjusted.[1] The policy rate has been at 2.25% since late 2025, and the Bank held again on September 2.[4]

That does not make housing affordable, and it does not turn renters into buyers. Ontario home prices remain high relative to incomes, and five-year fixed rates are well above where they were in 2021. The likely result is not a wave of first-time purchases. It is a gradual release of postponed rental demand: the couple who finally get their own one-bedroom, the roommate who moves out, the family that trades up from a basement unit to a purpose-built two-bedroom.

Where postponed demand lands first

If the recovery comes through household formation rather than population growth, it will not be spread evenly. Three patterns are worth watching:

  • Larger units. Families who doubled up need bedrooms. The August data already showed three-bedroom purpose-built rents holding up far better than studios.[3]
  • Mid-market, not luxury. Households with rebuilt budgets are more likely to move into the middle of the rent distribution than the top. Buildings priced near local median incomes benefit before new towers asking premium rents.
  • Employment-anchored cities. Where jobs are stable, deferred moves turn into leases faster. Where trade exposure is high, uncertainty will keep postponing them.

Underwriting the next 18 months

Tal's timeline suggests a transition rather than a rebound, and underwriting should reflect that. A sensible base case keeps today's concessions and vacancy through mid-2027 and treats any pickup in absorption as upside rather than the plan. The difference between this cycle and the last is that the drag on renters' finances is ending, rather than still building.

Higher long-term rates are the constraint Tal kept returning to.[2] For owners, debt costs will not bail out thin margins. The buildings that come through the transition in good shape will be the ones whose rent rolls already work at today's financing costs.

The renewal wave was a homeowner story that quietly became a rental story. Its end is likely to follow the same path.

Sources

[1] Benjamin Tal: This transition period will lead to better things, RENX (Sept. 10, 2026): https://www.renx.ca/benjamin-tal-this-transition-period-will-lead-to-better-things

[2] Canadian Apartment Investment Conference, 2026 agenda (Sept. 9, 2026): https://informaconnect.com/canadian-apartment-investment-conference/agenda/1/

[3] National Rents Fall for First Time in Five Months as Annual Decline Widens to 4.8%, Rentals.ca and Urbanation (Sept. 9, 2026): https://press.rentals.ca/470657-national-rents-fall-for-first-time-in-five-months-as-annual-decline-widens-to-48

[4] Bank of Canada maintains the policy rate at 2¼% (Sept. 2, 2026): https://www.bankofcanada.ca/2026/09/fad-press-release-2026-09-02/