Canada's Rental Market Shifts as Vacancy Rates Rise and Rent Growth Slows in Q4 2025
Event summary
- Canada's vacancy rate rose to 4.5% in Q4 2025, the highest since Yardi began tracking in 2020.
- New lease rent growth slowed to 0.7% nationally, with several Ontario markets seeing negative growth.
- Canada's six largest CMAs delivered 94,611 units in 2025 through November, up 1.9% from 2024.
- Operating costs varied significantly by province, averaging $8,004 per unit nationally in 2025.
The big picture
Canada's rental market is transitioning from a period of high demand and low supply to a more balanced state, driven by significant new purpose-built rental deliveries. This shift is already moderating rent growth and increasing vacancy rates, requiring housing providers to adjust pricing and investment strategies. The market's resilience will depend on how quickly supply and demand rebalance across major metros.
What we're watching
- Supply Impact
- How the pace of new supply deliveries will affect vacancy rates and rent growth in 2026.
- Regional Disparities
- Whether Ontario's negative rent growth will spread to other provinces or remain isolated.
- Operational Costs
- The extent to which rising operating costs in high-expense provinces will pressure profitability.