Canada’s vacancy rate rises amid historically high rental construction

Ottawa, December 11, 2025

Vacancy rates for purpose-built rentals rose across major Canadian cities in 2025 as the national rate increased to 3.1%, up from 2.2% in 2024 and above the national 10-year average. This increase was driven by historically high rental unit completions and slower population and economic growth according to Canada Mortgage and Housing Corporation’s (CMHC) 2025 Rental Market Report. Rental condominium apartment vacancies also increased this year but stayed well below purpose-built levels.

Despite the national vacancy rate rising and landlords having to compete more to attract tenants, such as lowering asking rents for available units in some markets, overall affordability remains a challenge. The average rent paid by all tenants for 2-bedroom units rose 5.1%, driven in part by units being repriced higher at turnover, when a unit is newly leased.

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“The tight conditions that defined rental markets in the past few years in Canada’s largest cities loosened in 2025. Historically high rental supply completions combined with weaker demand caused by slower population and economic growth led to a rise in vacancy rates in many large cities,” said Tania Bourassa-Ochoa, CMHC’s Deputy Chief Economist. “Purpose-built rental operators responded to these market conditions by offering incentives to new tenants, such as a month of free rent, moving allowances and signing bonuses. However, affordability is still a challenge in most markets, as the supply of units affordable to lower income households remains low.”

Large CMAs:

Toronto: The purpose-built apartment vacancy rate hit 3% for the first time since the pandemic, driven by declining immigration, less demand from international students, and economic uncertainty. However, rental condo apartment vacancy rates remained low at 1%. Turnover rents declined, leading to more renter mobility and an 8.7% turnover rate, up from record lows.

Vancouver: Vacancy rates in purpose-built rentals reached 3.7%, the highest level since 1988, and rent growth is at a two-decade low. This was due to record levels of rental supply coming to market, and reduced demand from lower population growth. Despite this, affordability challenges persist for lower-income households.

Montreal: Vacancy rates of both purpose-built and condominium apartment rentals rose due to reduced numbers of non-permanent residents, including temporary workers and international students. Average rents grew by 7.2%, outpacing income growth and worsening affordability. This increase was largely driven by lease renewals applying higher rent increases.

Calgary: Calgary’s vacancy rate remained stable at 5%, due to robust demand keeping pace with significantly higher rental supply, which in 2025 grew at the fastest pace in decades. Purpose-built rental supply led this growth, expanding by 11%, though that supply was concentrated in higher-end units.

Edmonton: Purpose-built rental vacancies increased to 3.8%, driven by strong completions and slower household formation despite steady migration inflows. Over 2,000 rental condos were added to the market in 2025, pushing the share of condo apartments in the rental universe up to 37%. However, vacancies for this unit type stayed low at 1.7%, showing strong demand for modern units.

Ottawa: The rental market eased slightly in Ottawa, with vacancy rates rising to 3%. Newly built units had the highest vacancy rates at 6.7%, more than double the city average. However, lower-rent units have a vacancy rate under 1%, keeping turnover historically low.

Halifax: Vacancy rates increased slightly as migration slowed and supply grew, driven by record rental completions in recent year. However, rents still grew 6.7%, impacting affordability. A 29% rent gap between turnover and non-turnover units kept turnover rates low.

CMHC’s Fall 2025 Rental Market Report also provides an update on rental market conditions in Victoria, Regina, Saskatoon, Winnipeg, Hamilton, Kitchener – Cambridge – Waterloo, Windsor, St. Catherines-Niagara, London, Gatineau, and Québec, as well as new data for all urban areas with populations of 10,000 or more.

Read the full report on the CMHC website.

Watch CMHC's podcast discussing the latest RMR.