How Vacancy is Evolving in Canada

We’ve been watching Canada’s multifamily market quietly change over the past year. Not collapse. Not boom. Change. And the latest CMHC rental data confirms what has been showing up on the ground: the era of extreme tightness is easing, but affordability pressures haven’t gone anywhere.

Nationally, the vacancy rate for purpose-built rentals moved up to 3.1% in 2025, well above last year and above the ten-year average. That’s a meaningful shift after several years of near-zero slack in many major cities. The driver isn’t a sudden drop in demand, it’s supply. Rental completions reached levels we haven’t seen in decades, while population growth and economic momentum slowed at the same time. What’s notable is how uneven this adjustment has been across markets and asset types. Rental condos remain structurally tighter than purpose-built stock in most cities, and lower-rent units continue to behave as if the market never loosened at all.

Toronto is a good example of this bifurcation. Purpose-built vacancy finally touched 3%, the first time since the pandemic. Immigration slowed, international student demand softened, and economic uncertainty pushed some households to delay moves. At the same time, rental condo vacancy held near 1%. Turnover rents declined, mobility increased, and tenants suddenly had leverage, that is something that simply didn’t exist two years ago. Yet this is still not a loose market by any historical standard.

Vancouver tells a different story, but with the same underlying theme. Purpose-built vacancy reached 3.7%, the highest level since the late 1980s. Rent growth has slowed to a two-decade low. Record levels of new supply finally hit a market that had been supply-starved for years. And yet, affordability for lower-income households remains strained. The units coming online are largely new, and priced accordingly.

Montreal stands out for a different reason. Vacancy rose across both purpose-built and condo rentals as the number of non-permanent residents declined. But rents still climbed sharply, over 7%, driven by lease renewals rather than new listings. In other words, sitting tenants absorbed most of the rent growth, even as the market technically loosened. That’s not a healthy dynamic, and it highlights how supply alone doesn’t automatically translate into affordability.

Calgary continues to defy easy narratives. Vacancy held steady at roughly 5% despite one of the fastest expansions of rental supply in decades. Purpose-built inventory grew by double digits, but demand kept pace. The catch is that most of the new product sits at the higher end of the market. Entry-level affordability remains constrained, even in a city often described as “balanced.”

Edmonton shows a similar pattern. Purpose-built vacancy rose to 3.8% as completions surged and household formation slowed. Condo rentals now make up more than a third of the rental universe, yet vacancy in that segment remains low. Tenants clearly prefer newer, well-located units, and they’re willing to compete for them.

Ottawa and Halifax reinforce the same conclusion from different angles. In Ottawa, overall vacancy increased modestly, but newly built units posted vacancy rates more than double the city average. Meanwhile, lower-rent units remain effectively full. Halifax saw slightly higher vacancies as migration cooled and supply grew, yet rents still climbed close to 7%, with large gaps between turnover and non-turnover units discouraging mobility.

What I take away from this data is not that the multifamily market is weakening. It’s that it’s fragmenting. New supply is finally giving tenants options at the top end, while older, lower-rent stock remains fiercely competitive. Incentives are appearing, but only where landlords truly need them. From an investment perspective, this is a market that rewards selectivity. Broad narratives miss the point. The opportunity, and the risk, now sits at the intersection of asset age, rent band, and local demand drivers. That’s where I’m focusing my attention.