Mid-year update shows relief concentrating in high-end units, while lower-priced segments remain locked tight
New data on Canada rental market affordability shows a two-speed story. Increased supply and slower demand growth are easing conditions in the country’s largest cities. But the shift is being driven largely by higher-priced units sitting vacant longer, while lower-rent segments remain tight.
That is the central finding of Canada Mortgage and Housing Corporation’s (CMHC) mid-year rental market update, released June 9, 2026. It covers Vancouver, Edmonton, Calgary, Toronto, Ottawa, Montréal, and Halifax — a snapshot of rental conditions across Canada’s largest urban centres.
Asking rents falling – with a catch
Asking rents declined in Toronto, Vancouver, Calgary, and Ottawa. Montréal and Edmonton showed little change. Halifax recently stabilized after previous declines.
According to the report, landlords in major markets cite increased competition from new supply as the primary driver. In Toronto and Vancouver, a surge of newly completed condominium apartments — many of which couldn’t be absorbed in the ownership market — have flooded into the rental pool. This pushed supply above demand for new units.
To attract tenants, landlords have been offering incentives. CMHC reports these have intensified over the past six months and now include:
- free or discounted parking
- gift cards and move-in credits
- several months of free rent
- cash bonuses in some cases
This relief applies to asking rents only. Average rents paid on occupied units continued to rise in the first quarter of 2026 — driven by higher rents at turnover — apart from Toronto where gains remained modest.
Asking rents are declining, vacancies are rising, and some landlords are offering incentives. Yet many renters still struggle to find affordable housing.
— CMHC (@CMHC_ca) June 9, 2026
Canada's rental market is easing ... but not for everyone.
🔗 https://t.co/8CVtndwpoI pic.twitter.com/31SYqUWjOz
Canada rental market affordability gap widens for lower-income renters
Vacancy increases are mostly concentrated in new supply and newer buildings. Older stabilized buildings and family-sized units remain tight. Tenant mobility is highest in more expensive units and much more limited in lower-rent segments — even as turnover improved slightly across the board between 2024 and 2025.
In Toronto and Vancouver, pressure remained in the persistently tight first rent quartile, suggesting limited downward filtering of new supply to lower-income renters. In Montréal and Halifax, vacancies rose but tenants were less responsive or willing to move — an unusual divergence from other markets.
“Recent supply growth is improving choice in some segments — particularly newer, more expensive units,” said Tania Bourassa-Ochoa, deputy chief economist at CMHC. “However, persistently tight conditions in lower segments highlight that affordability challenges remain and will take time to address.”
Rethinking the 3% vacancy benchmark
The report raises an important question for brokers and lenders tracking market conditions: is 3 percent still the right benchmark for a balanced rental market?
CMHC’s analysis challenges this long-held threshold, noting that the balanced vacancy rate varies by market depending on these factors:
- construction ease
- local economic conditions
- rent regulations
- rental stock composition
The balanced range is defined as the vacancy rate at which real rent growth is near zero.
Preliminary CMHC results show most major markets are now within or near their historical balanced ranges. Vancouver sat just above its balanced range in 2025 — suggesting some softening ahead. Halifax sat just below, signalling ongoing tightness despite headline vacancy gains.
Calgary and Edmonton require higher vacancy rates before rents stabilize — and historically have shown sharper volatility above and below that threshold.
What Canada rental market affordability means for brokers
For clients renting and saving toward homeownership, the picture is more complicated than the headlines suggest.
Softer asking rents at the high end may reduce urgency to buy. But for clients in lower-priced or older rental stock, conditions remain tight. And average rents on occupied units are still rising — meaning many existing renters are not seeing relief at all.
CMHC expects rental demand to hold up despite slower population growth, supported by:
- return-to-office trends drawing workers back to major centres
- large young-adult cohorts seeking independence
- easing housing costs enabling previously suppressed households to form in Toronto and Vancouver
The full mid-year update is available on the CMHC website.
