Canada’s rental market finally cools
New data showed a softer, more balanced landscape for landlords and lenders
By Liezel Once
22 Jan. 2026
Canada’s apartment sector moved further from the red‑hot conditions of recent years in late 2025, as fresh supply, slower population growth and affordability strains pushed vacancy higher and took the edge off rent gains.
Yardi’s latest Canadian National Multifamily Report showed the national apartment vacancy rate climbed to 4.5% in Q4 2025, the highest level since the firm began tracking the market in 2020.
New lease rent growth slowed to just 0.7% year over year, down from 6.4% a year earlier, with several large Ontario markets slipping into negative territory.
Kitchener–Cambridge–Waterloo posted a 2.7% decline in new lease rents, Toronto fell 1.0% and Hamilton edged down 0.2%.
“Canada’s rental market is entering a new chapter,” said Peter Altobelli, vice president and general manager at Yardi Canada Ltd.
“We haven’t seen this level of new purpose-built rental supply in a long time, and it’s already shifting market conditions. Reliable, timely data will be essential for housing providers making decisions on pricing, operations and investment.”
Yardi’s data, covering 5,900 properties and more than 517,000 private rental units nationwide, also pointed to rising operating pressures. Annual expenses averaged $8,004 per unit in 2025, with Ontario at $8,822 and Alberta at $8,044, compared with $6,616 in Nova Scotia and $6,727 in Saskatchewan.
Canada Mortgage and Housing Corporation’s 2025 Rental Market Report found vacancy for purpose‑built rentals reached 3.1%, up from 2.2% a year earlier. CMHC pointed to historically strong completions of rental units, combined with weaker demand caused by slower population and economic growth, as key drivers of softer rents.
New construction remains central to the story. Canada’s six largest CMAs delivered 94,611 units in 2025 through November, up 1.9% from the same period in 2024. At the same time, developers pivoted toward purpose‑built rental as condo starts fell and dedicated rental starts rose, helped by programs such as MLI Select and expanded securitization limits.
Many operators also responded to looser conditions by offering incentives such as free rent, moving allowances and signing bonuses, even as affordability was still a challenge in most markets.
This article is part of CMP’s Commercial sector focus for January, spotlighting the commercial mortgage market and the key trends and issues facing the space in 2026.
mpamag.com/ca/specialty/commercial/canadas-rental-market-finally-cools/562812
