Vancouver’s vacancy rate hit 3.7% in 2025 — the highest level in 30 years. Across the country, the average asking rent fell to $2,030 in February 2026, marking the 17th consecutive month of year-over-year declines. After years of near-zero vacancy and relentless rent hikes, the Canadian rental market has flipped. New units sit empty for months, landlords offer free months of rent just to get someone through the door, and tenants finally have room to negotiate. But this relief is not evenly spread, and the reasons behind it are more complicated than simple oversupply.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The broad picture is clear: more supply, slower population growth, and a wave of new investor-owned condos are reshaping the rental landscape. Yet the experience of looking for a rental today depends heavily on where you live, what kind of unit you want, and whether you’re a new tenant or renewing an existing lease. Here’s what you actually need to know.
What This Shift Actually Means for Landlords and Tenants
The central concept driving the gap between new and existing tenants is vacancy decontrol.
What I tend to notice is that most people assume falling asking rents mean everyone pays less. That’s not how it works. The gap between what a tenant in a rent-controlled unit pays and what a new tenant is quoted can be hundreds of dollars a month, and that gap is widening as new supply puts downward pressure on advertised rents while existing rents climb at turnover.
Regional Rent Trends and the Full Cost Picture
National averages hide extreme variation. Vancouver and Toronto rents have fallen to their lowest levels since early 2022, with two-year drops of 13.3% and 11.8% respectively, according to Rentals.ca data. Meanwhile, Edmonton rents have risen 17.4% over three years, and Saskatchewan apartment rents are up 16.3% over the same period. The table below shows where things stand across major markets.
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| City | Avg Asking Rent (2-bed) | Two-Year Trend | Vacancy Note |
|---|---|---|---|
| Vancouver | $3,100 | −13.3% | Highest vacancy in 30 years |
| Toronto | $2,660 | −11.8% | New builds at 7% vacancy |
| Calgary | $1,900 | −4.6% | High vacancy across all quartiles |
| Edmonton | $1,580 | +17.4% over 3 years | High turnover but still growing |
| Montreal | $1,900 | +7.5% over 3 years | Vacancies rising, turnover falling |
The headline numbers don’t tell the whole cost story. For landlords, falling asking rents squeeze cash flow while mortgage costs remain high. For tenants, the advertised rent is just the starting point — many landlords are now offering one to two months free, which effectively lowers the annual cost. But those incentives disappear when the lease renews, and the base rent may be higher than comparable units if you’re not paying attention.
What I’d do here is look beyond the monthly rent number. The full cost of a rental includes incentives, parking fees, utility arrangements, and the likelihood of a rent increase at renewal. A unit advertised at $2,200 with two months free effectively costs $1,833 per month over the first year — but if the landlord can raise rent by the provincial guideline (2.1% in Ontario, 2.3% in BC) in year two, that gap narrows fast. Worth weighing against the broader interest rate environment that still keeps mortgage costs high for investor-landlords.
Common Mistakes Both Sides Make in This Market
Assuming Falling Asking Rents Help Everyone
This is the most common misunderstanding. Asking rents measure what landlords advertise for vacant units. Average rents for occupied units are still rising because turnover resets rents higher. In Ontario, the 2026 rent increase guideline is 2.1%. In British Columbia, it’s 2.3%. A tenant who signed a lease in 2022 at $1,800 may now be paying $1,980 after two annual increases. Meanwhile, a new tenant in the same building might be offered a unit at $2,100 but negotiate down to $2,000. The existing tenant is paying less than market, but the new tenant is paying less than the landlord initially wanted. Both are paying more than they were two years ago. The relief is relative, not absolute.
Landlords Holding Out for Peak Pricing
Some landlords still list units at 2023 or 2024 rent levels, then offer incentives rather than lowering the asking price. This strategy can backfire. Units that sit vacant for 30 days or more lose rental income that can’t be recovered. In Toronto, new purpose-built rentals have vacancy rates as high as 7%, and the majority of new buildings offer at least one incentive. The smarter move is to price competitively from day one. A unit that rents in two weeks at $2,000 generates more annual income than one that sits empty for six weeks at $2,200.
Tenants Not Negotiating
Many renters still assume the advertised price is the price. In this market, it’s not. Condo vacancies of 30 days or more often lead landlords to offer $100 to $150 below the listing price. The best approach is to view at least 10 comparable units, track how long each has been listed, and use that as leverage. If a unit has been on the market for three weeks and a similar one down the street rented for $100 less, you have a case to make. The research from The Globe and Mail confirms that renters are gaining negotiation leverage, especially in the condo market where investor-owners are eager to avoid extended vacancies.
Ignoring the Rent-Control Status of the Unit
Units built after 2018 in Ontario are exempt from rent control. The same applies to newer buildings in many provinces. A tenant who moves into a post-2018 unit thinking they have predictable annual increases may face a 10% or 20% jump at renewal if the market shifts. Understanding the rent-control status of a unit before signing is just as important as the monthly payment. This is where vacancy decontrol and rent-control exemptions create very different outcomes for tenants depending on the building’s age and the province they’re in.
How to Navigate the Current Rental Market
Pricing a Unit as a Landlord
Start by surveying comparable units in a 2-kilometre radius. Check how long they’ve been listed and whether they’ve had price drops. If similar units are offering one month free, you likely need to match that. The goal is to minimize vacancy time, not maximize the headline rent. A unit that rents in 10 days at $2,000 outperforms one that sits for 45 days at $2,200. Consider using a smart lock for self-showings to reduce the coordination burden and allow prospective tenants to view the unit on their schedule.
Negotiating as a Tenant
Research the market thoroughly before you start viewing. Track listing ages and price reductions. When you find a unit you like, ask how long it’s been vacant and whether the landlord is open to incentives. Cash bonuses, free parking, and a free month are common. If the unit has been listed for more than three weeks, you have leverage. The most effective approach is to present a rental application with strong references and a willingness to sign quickly, in exchange for a rent reduction or a concession. The JustAnswer Canada Lawyers service can help if you need a quick review of a lease term or a question about landlord-tenant rights in your province.
Understanding the Condo Wave
Between 28,000 and 30,000 condo units are expected to complete in the Greater Toronto Area in 2026 alone, most of them 600 square feet or smaller. These investor-owned units are competing directly with purpose-built rentals, putting downward pressure on rents across the board. For tenants, this means more choice and more negotiation power. For landlords, it means longer vacancy periods and a need to differentiate. Units with in-suite laundry, parking, or outdoor space command a premium. Smaller, amenity-heavy units face the most competition.
What’s Coming Next: Vacancy Decontrol and Regulatory Shifts
With vacancy rates rising and rent control rules creating a two-tier system, provincial governments are under pressure to address the gap between sitting tenants and new tenants. Any changes to rent-control rules — whether expanding coverage to newer buildings or tightening vacancy decontrol — would reshape the market significantly. For now, the key is to understand the rules that apply to your specific unit and province. The 2026 rent guidelines are 2.1% in Ontario and 2.3% in British Columbia, but those caps only apply to units covered by rent control. For buildings exempt from control, any increase is legal at lease renewal. A video doorbell can be a practical addition for landlords managing showings and security remotely, especially in a slower market where units sit longer.
Frequently Asked Questions
Why are rents falling in Vancouver and Toronto but rising in Edmonton and Saskatchewan? ▾
If asking rents are falling, why is my rent still going up at renewal?▾
How long should I expect a rental to sit empty before it rents?▾
What’s the best way to negotiate rent as a tenant right now?▾
Does the rent-control status of a building really matter that much?▾
Will the rental market get even softer for landlords in 2026?▾
What the Next Phase of This Market Looks Like
The Canadian rental market is in the middle of a structural shift that few predicted two years ago. More supply, slower population growth, and a wave of investor-owned condos have handed negotiating power back to tenants in most major cities. But this is not a uniform correction. The most affordable units remain tight, existing tenants in rent-controlled buildings see little relief, and some regions are still seeing rent growth. The question going forward is whether the current wave of supply will be enough to keep rents in check once population growth picks up again, and whether provincial governments will adjust rent-control rules to address the growing gap between sitting and new tenants. The answers to those questions will determine whether this is a short-term adjustment or the start of a more balanced rental market.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Will Canada’s Housing Bubble Ever Burst or Is It the New Normal?.
Sources and Further Reading
The Role of Interest Rate Hikes in Canada’s Housing Market Slowdown — How mortgage rates and central bank policy connect to the broader housing and rental slowdown.
Why More Canadians Are Turning to Crowdfunded Real Estate Investments — Alternative investment paths for landlords and investors navigating a softer rental market.
CMHC (2026). 2026 Mid-Year Rental Market Update. 🔗
Rentals.ca (January 2026). Rentals.ca January 2026 Rent Report. 🔗
The Globe and Mail (2025). More rentals are sitting empty in Canada, but it’s not enough to relieve. 🔗
Bubblewatch.ca (2026). Rental Market Crisis & Vacancy Decontrol 2026. 🔗
