Canada multifamily
market report

Rental market conditions vary by product type, with conditions tighter in the affordable segment of the market as tenants grapple with higher costs of living. This is most pronounced in rent-controlled markets like Vancouver, Toronto, and Montréal where turnover of older units is historically low despite increasing vacancy rates and leaseup periods for new buildings. Owners of older, more affordable stock are seeing rental income grow from tenants who can absorb rent increases upon renewal, or from the limited instances of turnover when rents can be marked-up to market but still at a more competitive rate than newer product. For new supply, incentives and softening asking rents are key to support absorption, especially with more competition from rental condos.

According to CMHC’s Spring 2026 Housing Supply Report, Canada’s housing starts rose 6% in 2025, driven largely by record purpose-built rental construction, with apartments dominating new development. Starts reached all-time highs in Calgary, Edmonton, Ottawa, and Montréal, and their second-highest level on record in Toronto. This surge has expanded completions, especially in Western markets, improving availability and easing supply pressures. On the other hand, weaker condo development, reflected in falling presales and rising unsold inventory, is constraining the future ownership pipeline. The current cycle reflects a clear shift toward rental-driven supply, supporting longterm multifamily depth. Near-term excess supply is expected to gradually ease as new units are absorbed.

Though overall population is declining in Canada in 2026, demand for rental housing in major cities is expected to be positive in 2026. CMHC forecasts positive rental household formation, nationally. Household formation growth will be led by younger cohorts who are more likely to rent. This is exacerbated by higher economic uncertainty and out-ofreach home ownership costs. In Vancouver and Toronto, concessions and softer rents are improving affordability which is expected to support more rental household formation. Population growth, though negative in Canada overall, is still a key demand driver in markets like Ottawa, Edmonton and Calgary. Montréal’s rental household growth, unlike the other markets, is expected to be neutral due to a sharper decline in population cancelling out the impact of new demand from younger cohorts.