What rising vacancies and record rental construction mean for tenants
Canada Mortgage and Housing Corporation (CMHC) says purpose-built rental construction is at an all-time high, while vacancy rates are rising and rent growth is slowing in parts of Canada.
That does not mean rents are falling everywhere or that rental housing has become broadly affordable. The clearest easing is concentrated in newer, higher-priced units, while older buildings, family-sized rentals and lower-priced units can remain tight.
Where advertised asking rents have eased
CMHC’s June 2026 update reported declining asking rents in Toronto, Vancouver and Calgary. Asking rents in Ottawa had been declining since the second quarter of 2025.
Montréal and Edmonton showed little change, while Halifax had become more stable after earlier declines.
CMHC primarily attributes lower asking rents in major markets to increased competition from new rental supply. In Toronto and Vancouver, competition also came from newly completed investor-owned condominium apartments.
Asking rent is the advertised price for a unit available to a prospective tenant. It is not the same as the average rent paid across units that are already occupied. This distinction is important because advertised rents eased in several markets while average rents paid by existing tenants generally continued to increase.
Vacancy conditions differ by city
CMHC’s preliminary analysis places most selected major markets within or near their historically estimated balanced vacancy ranges. These ranges vary by market and period. CMHC cautions that the traditional 3% threshold should not be applied as a universal definition of a balanced rental market.
The following figures are 2025 total apartment vacancy rates for the specified census metropolitan areas. They are not 2026 measurements or forecasts.
| Census metropolitan area | 2025 apartment vacancy rate | Preliminary estimated balanced range |
|---|---|---|
| Vancouver | 3.7% | 2.0% to 3.0% |
| Edmonton | 3.8% | 3.5% to 6.0% |
| Calgary | 5.0% | 3.0% to 5.5% |
| Toronto | 3.0% | 2.5% to 4.0% |
| Ottawa | 3.0% | 2.0% to 4.0% |
| Montréal | 2.9% | 2.5% to 4.0% |
| Halifax | 2.7% | 3.0% to 4.5% |
CMHC’s Fall 2026 Housing Supply Report describes current conditions as market normalization rather than widespread rental oversupply.
Newer rentals are seeing the most vacancies
Vacancies were highest in rental structures built after 2020. CMHC describes a short-term imbalance in newer, higher-priced rental segments, where some units are taking months to rent.
Older stabilized buildings and family-sized units remained tighter. Pressure also persisted in the lowest rent quartile in Toronto and Vancouver, indicating that the benefits of new high-end supply had not moved fully into the least expensive rental segment.
This is why an increase in the overall number of available units may not help every renter equally. A household searching for a lower-priced or family-sized unit may face different conditions from someone considering a recently built, higher-priced apartment.
Construction reached a high in CMHC’s key-market series
CMHC characterizes purpose-built rental construction nationally as being at an all-time high. The supplied national summary does not provide a corresponding nationwide unit count or complete historical series.
A separate series in CMHC’s Fall 2026 Housing Supply Report recorded 69,475 apartment rental starts in 2025 across the report’s seven key markets. That was the highest annual figure in its table covering 1999 through 2025.
Purpose-built rental housing accounted for approximately two-thirds of all apartment starts in those seven markets in 2025. These figures cover the key markets in the report and should not be treated as a complete national construction count.
Prospective and existing tenants are seeing different results
For some prospective tenants, rising supply has created more choice and some negotiating room. Asking-rent-to-income ratios generally declined across most major census metropolitan areas, producing what CMHC calls modest affordability gains and more options in selected market segments.
The picture was different for many existing tenants. In the first quarter of 2026, affordability for existing tenants worsened from one year earlier in most key markets. Edmonton and Toronto were the exceptions.
Slower rent growth also does not mean rent levels are lower. It means rents are growing more slowly, and the result for an individual tenant will depend on the unit and market involved.
Do You Need to Do Anything?
These CMHC publications do not create an application, filing requirement, eligibility rule, government program or mandatory action for renters or developers.
If you are looking for a rental, CMHC’s findings suggest that national trends alone are not enough to assess your prospects. Useful local comparisons may include:
- Vacancy conditions in your city or neighbourhood;
- Current advertised asking rents;
- Whether the unit is in a newer or older building;
- The size of the unit, including whether it is family-sized; and
- Whether the unit is in a lower-priced or higher-priced segment.
Prospective tenants in softer market segments may compare listings and ask about incentives. The CMHC sources do not guarantee that incentives or lower asking rents will be available in a particular area.
Bottom Line
Record purpose-built rental construction and rising vacancies are giving some prospective tenants more options in selected major markets. Advertised asking rents have declined in Toronto, Vancouver and Calgary and had also been declining in Ottawa, according to CMHC’s June 2026 update.
However, the improvement is uneven. Average rents paid by existing tenants generally continued to rise, and lower-priced units remained tight, particularly in Toronto and Vancouver. Newer, higher-priced units are experiencing the clearest easing.
The findings cannot determine whether rents will become more affordable in a particular reader’s area or over a particular time period. Future demand, completions and project launches could also change current conditions.
Official Government Sources
- CMHC’s 2026 Rental Housing Development Survey summary
- CMHC 2026 Mid-Year Rental Market Update
- CMHC Housing Supply Report
- CMHC Rental Market Report data tables
- CMHC Rental Market Survey methodology
This article provides general information based on official Canadian government sources. Government programs, amounts, eligibility rules and deadlines can change. Check the official sources linked above for information specific to your situation.