Rents retreat while costs climb in Canada’s once red hot apartment market

Canada’s rental market just logged its ninth straight quarter of rising vacancy while new lease rents turned negative, according to Yardi’s Canadian National Multifamily Report for Q2 2026.  

Yardi says the national apartment vacancy rate hit 5.1 percent in Q1 2026, up 60 basis points from the previous quarter and 110 basis points year over year.  

Bachelor units show the most weakness, with an 8.3 percent vacancy rate.  

Calgary has the highest overall vacancy at 7.3 percent, followed by Edmonton at 6.2 percent and Kitchener–Cambridge–Waterloo and Saskatoon at 5.9 percent.  

Halifax and Winnipeg remain tighter at 2.8 percent and 3.5 percent.  

At the same time, rent momentum is fading.  

Yardi reports that average national in‑place rent rose $8 in the quarter to $1,761, with annual growth slowing to 2.7 percent, the lowest rate in four years.  

Most of that growth comes from lease renewals.  

Halifax leads year‑over‑year in‑place rent growth at 6.0 percent, ahead of Montreal at 3.7 percent and Winnipeg at 3.5 percent, while Calgary is the only major market in negative territory at -2.0 percent.  

The pressure shows up most clearly on new deals.  

Yardi calculates that lease‑over‑lease rents on new leases fell to -1.0 percent nationally in Q1 2026, after peaking at 13.1 percent in Q3 2023.  

Eight of the top 12 CMAs recorded negative new‑lease growth, led by Kitchener–Cambridge–Waterloo at -5.0 percent, Vancouver at -3.6 percent, London at -3.0 percent, Toronto at -2.6 percent and Calgary at -2.4 percent.  

Halifax and Hamilton posted 1.6 percent gains, Ottawa–Gatineau edged up 0.7 percent and Winnipeg was flat.  

Supply is building.  

Drawing on Common Sense Economics and Canada Mortgage and Housing Corporation data, Yardi says housing completions rose 22.3 percent in the 12 months ending November 2025 to 171,000 units. 

 British Columbia saw deliveries jump 43.0 percent to 38,596 units, Quebec 31.1 percent to 42,546, Alberta 6.5 percent to 21,933 and Ontario 4.1 percent to 48,816.  

Toronto delivered 26,798 apartments in the 12 months ending February 2026, down 5.4 percent year over year, while Vancouver delivered 24,686 apartments, up 25 percent.  

Montreal added 20,039 units, down 0.2 percent, and Calgary 11,886, down 11.5 percent.  

Yardi notes that apartment starts are up almost 10 percent year over year. Starts climbed 29.6 percent in Alberta to 26,732 and 25.9 percent in Quebec to 45,197 in the 12 months ending February 2026. 

Ontario posted a 3.2 percent increase to 43,377 starts, while British Columbia slipped 1.7 percent to 33,638. Montreal led all CMAs with 24,353 starts, a 44.0 percent rise.  

High development fees remain a sticking point.  

On the policy front, Yardi reports that Ontario and the federal government have announced a partnership with $8.8bn in potential funding over 10 years to support housing‑enabling infrastructure in the province.  

Demand is softening alongside this supply.  

Yardi describes economic growth as tepid as Canada wrestles with diversifying trade routes, shifting domestic manufacturing, geopolitical tension, rising energy prices and slower population growth.  

The report notes that the economy added 14,100 jobs in March after shedding 84,000 in February, with the unemployment rate in February up 10 basis points year over year to 6.7 percent and joblessness for 15‑ to 24‑year‑olds at 14.1 percent.  

Population growth has reversed.  

Citing Statistics Canada, Yardi says Canada’s population shrank by more than 100,000 in 2025 to 41.5 million, largely because of fewer foreign students and the emigration of non‑permanent residents whose temporary status ended.  

The number of non‑permanent residents fell by more than 470,000 from October 2024 to 2.7 million as of January 2026.  

Yardi notes that this helps ease previous housing shortages but pushes vacancy higher in immigrant‑heavy markets such as the Greater Toronto Area.  

Turnover and tenure are also shifting.  

Yardi reports that annual turnover rose to 25.8 percent in Q1 2026 from 23.4 percent a year earlier, even as the average resident length of stay increased from 39 to 40 months.  

Hamilton and Toronto record the longest average stays at 53 months, while Saskatoon sits at 24 months and Calgary and Edmonton at 27 and 29.  

Costs are moving the other way.  

Yardi calculates that expenses averaged $8,053 per unit nationally in the year ending Q1 2026, with Ontario at $8,858 and Alberta at $8,122.  

Saskatchewan had the lowest average at $6,733, followed by Nova Scotia at $6,810.  

The report says utilities, labour, insurance and maintenance are rising faster than income and argues that operators should focus on honing management skills and using technology such as AI to improve efficiencies.  

Yardi characterises Canada’s multifamily fundamentals as cooling because of declining population growth, reduced affordability and a weak labour market.  

Vacancy is climbing, new lease rates are falling in most markets and the renter pool is shrinking, according to Peter Altobelli, vice president and general manager, Yardi Canada Ltd.  

He said these trends are “real signals that the market is shifting quickly” and that “the window for the industry to adapt is now.”