There’s plenty of supply for Canadian renters—if they can actually afford it. The CMHC’s 2025 Rental Report shows vacancy rates have more than doubled record lows. They note the increase helped slow price growth in purpose-built rentals (PBRs). Unfortunately, slow isn’t low—and far from a contraction. Rental prices continue to grow much faster than income.
Canadian Rental Vacancy Rate Hits A 4-Year High
Canadian rental vacancies have been climbing aggressively over the past few years. The national vacancy rate surged to 3.1% in October 2025, up from 2.2% a year prior. It may seem like a small number, but this means vacant rentals climbed 40% faster than demand. The rate is now at a 4-year high, matching the 2021 pandemic spike and similar to 2017.
Canada’s international student cap is helping, but it wasn’t the only reason. The vacancy rate plunged in 2022 after an immigration shock, hitting a record low in 2023. But the rate also began to climb higher in 2024, ahead of the recent immigration throttle. Supply began to improve before demand fell, despite still lagging population growth.
Rental Vacancy Surges In Toronto and Vancouver
The most surprising part of the data is where the vacancies are climbing. One would assume small cities where land is relatively cheap would fuel the supply. In reality, markets with notoriously slim supplies are the ones leading the way. Toronto’s vacancy rate hit 3.0%, the highest since the pandemic. Meanwhile, Vancouver reached 3.7%, marking the highest rate since 2000. That’s right—a 25-year high.
Canadian Rental Prices Are Rising With Vacancies
Despite rising vacancies, renters aren’t seeing much price relief. The cost of an average 2-bedroom apartment hit $1,550 in 2025, rising 5.1% from 2024. That’s lofty growth in contrast with a 2% inflation target, even with a 3.5% jump in wages over the same period.
Toronto and Vancouver have seen growth slow with the rise, according to the agency. However, they also observed acceleration in more affordable markets like Halifax and Montreal. The result is a narrowing gap between traditionally affordable and expensive markets. Not only is it harder to find an affordable unit in expensive cities. It’s also harder to save money by moving to smaller cities with less robust employment.
Canada’s rental crisis has seen minor progress over the past two years. Shifting from a crisis of inventory to a crisis of affordability still means it’s a crisis though. Sticky prices may be a sign of resilience or a pause before reality hits landlords. The flood of new completions set to arrive in the coming months are likely to motivate some clarity.
Easy solution. Buy a home and then you don’t have to worry about your landlord keeping up with inflation.
We have to recoup the cost of running the building, and the gov fudging lower inflation numbers doesn’t mesh with reality.
ah yes, the ever-present option of just buying a home.
The issue was supposed to be ‘supply’? We heard that from everyone from bankers to Carney. The problemtoday seems to be not supply, but profit. With prices eroding any potential capital gains to zero, the need to ‘cover’ expenses has returned.
The cost of owning g is only going to rise as cities facing major loss of developing permits needs to have new revenue from property taxes.
Is it just me or did the CMHC cook the books to make things look worse in 2022-23, when they ramped up their funding?
– they based a “rental report” on 2-bedroom PBR units
– most PBR units built are 1 bedroom, and 2-bedrooms have always been much more scarce
– the methodology footnotes state they previously assumed all units they didn’t know were 2-bedrooms, inflating the old supply count.
The chmc under carney trudeaustopped being any sort of insurance and became a cheerleader for credit risk.
With an unfunded liability of 1.5tr we should be more concerned about the chmc than trump.
Maybe the only solution is punitive taxes on greedy landlords, and then use the money to build affordable housing. The vacancy taxes we’ve seen in some places don’t go far enough.
Apply this punitive tax on landlords who hoard property and refuse to rent out their properties with the aim of jacking up rents through artificially generated scarcity.
And if they refuse to pay the taxes, expropriate the rental units and drop the rents so people can actually afford a place to live.
Ban Airbnb units too, and apply similarly heavy taxes for owners that won’t convert their properties to rental housing.
Without some really hard-core (and unpopular measures for certain factions of society)? the housing crisis will never get better.
Let ‘em cry, and squawk, and bitch. Enough is enough.