How Rental Vacancy Rates Affect What You Pay to Rent

A rental vacancy rate measures the share of rental units sitting empty at a given time, and it's one of the clearest signals of how much negotiating power renters have in a given market. As of CMHC's October 2025 Rental Market Survey, Canada's national vacancy rate for purpose-built rental apartments stood at 3.1%, up from 2.2% a year earlier — a shift that helped slow, but did not reverse, rent growth in most major cities.

What a Vacancy Rate Actually Measures

A vacancy rate is the percentage of a city's total rental units that are unoccupied and available at the time a survey is conducted. CMHC conducts its main Rental Market Survey once per year, typically in October, so the figure represents a single point-in-time snapshot rather than a continuously updated number.

A low vacancy rate generally means renters have fewer available units to choose from, which tends to give landlords more room to raise asking rents. A higher vacancy rate generally means more available supply relative to demand, which tends to slow rent growth or, in some cases, push asking rents down as landlords compete to fill units.

Why the "Balanced Market" Number Isn't the Same Everywhere

A 3% vacancy rate has traditionally served as the benchmark for a "balanced" rental market, but CMHC's 2026 Mid-Year Rental Market Update found this threshold doesn't hold consistently across cities. According to that update, the 3% benchmark fits Vancouver reasonably well, while most other major markets appear to balance closer to 4%, and Alberta markets such as Calgary and Edmonton appear to require vacancy rates above 5% before rent growth meaningfully slows.

This matters because comparing raw vacancy numbers across cities without adjusting for this difference can be misleading. A 4% vacancy rate might indicate a loosening market in Toronto, but the same 4% in Calgary could still reflect tighter-than-average conditions relative to what that city typically needs to stabilize rents.

How Vacancy Rates Have Shifted Nationally

Canada's national vacancy rate for purpose-built rentals climbed from a record low of 1.5% in 2023 to 3.1% in October 2025, according to CMHC's annual Rental Market Survey. Despite this increase in available supply, the average two-bedroom purpose-built rent still rose to approximately $1,550 in 2025, up 5.1% from 2024.

Vacancy also rose unevenly by city. Calgary's purpose-built vacancy rate held steady at approximately 5% through 2025 despite a surge in new construction, while CMHC's 2026 Mid-Year Update noted Vancouver was sitting just above its own balanced range and Halifax just below its balanced range as of that update.

What Rising Vacancy Means for Renters

Rising vacancy generally shifts negotiating leverage toward renters, though the effect shows up differently depending on unit type and building age. CMHC's data shows this pattern was already visible in 2025.

• More incentives on new leases: CMHC noted landlords increasingly offered incentives such as a free month's rent, moving allowances, or signing bonuses to attract tenants in 2025.
• Bigger gap between new and existing rents: Rent paid by new tenants declined in several major markets even as rent paid by sitting tenants continued to rise, meaning renters who move can sometimes find better deals than staying put.
• Newer buildings feel it first: CMHC found vacancies were highest in buildings constructed after 2020, since newer, higher-priced units often take longer to lease than older, more affordably priced stock.
• Affordability isn't automatically fixed: Even with vacancy rising nationally, CMHC reported the average two-bedroom rent still increased faster than inflation in 2025, so more available units doesn't necessarily mean lower rent overall.

Frequently Asked Questions

What is considered a good vacancy rate for renters?

A higher vacancy rate generally favours renters, but what counts as "balanced" varies by city. CMHC's 2026 Mid-Year Update found roughly 3% works as a balanced benchmark for Vancouver, closer to 4% for most other major markets, and above 5% for Alberta markets like Calgary and Edmonton.

Why did rent keep rising in 2025 even as vacancy rates increased?

Vacancy rose nationally from 2.2% in 2024 to 3.1% in October 2025, but the average two-bedroom rent still increased 5.1% over the same period, according to CMHC. This happened partly because vacancy increases were concentrated in newer, higher-priced buildings, while demand for existing, more affordable units stayed strong.

How often is the vacancy rate updated?

CMHC's primary Rental Market Survey is conducted once per year, typically in October, with results published in the months following. CMHC has also begun releasing supplementary mid-year updates, but the annual October survey remains the main benchmark most market analysis relies on.

Does a low vacancy rate mean I should expect a rent increase?

Not automatically, but it does raise the likelihood. Below a market's balanced threshold, CMHC's research has found that rent growth tends to accelerate faster than inflation, though the exact impact depends on your specific building, unit type, and local conditions.

Are vacancy rates the same for all types of rental units?

No. CMHC's 2025 data found vacancy rates varied significantly by rent quartile and building age, with newer, higher-end units generally showing higher vacancy than older, more affordable stock. This means the city-wide average vacancy rate may not reflect the specific type of unit you're searching for.

See How This Applies to Your Own Budget

Vacancy trends explain market-wide pressure, but your own decision comes down to your personal budget and timeline. Our Rent vs Buy calculator can help you weigh your specific numbers, and our complete guide to renting in Canada covers the broader rental process in more detail.