CMHC report shows vacancy rates rise to 2.2% as new rental supply slows rent growth in 2024
Canada’s rental market saw the largest supply increase in over three decades, with purpose-built rental apartments growing by 4.1 percent in 2024.
This growth raised the national vacancy rate to 2.2 percent, up from 1.5 percent in 2023, according to the latest Rental Market Report (RMR) from Canada Mortgage and Housing Corporation (CMHC).
Despite tight market conditions in most cities, the report noted a slowdown in average rent growth for two-bedroom apartments, which rose 5.4 percent in 2024 compared to a record 8 percent in 2023.
However, when units turned over to new tenants, rent growth remained high at 23.5 percent, unchanged from the previous year.
The rented condominium apartment market also remained tight, with the average vacancy rate for condominiums in the 17 census metropolitan areas (CMAs) surveyed by CMHC holding steady at 0.9 percent in 2024.
This was unchanged from 2023 but down from 1.6 percent in 2022. Average two-bedroom condominium rent increased to $2,173 in 2024, up from $2,049 the year before.
CMHC Deputy Chief Economist Tania Bourassa-Ochoa addressed the ongoing affordability issues for renters, stating, “Affordability for Canadian renters remains a challenge, particularly for new tenants who faced significant rent hikes as units turned over.”
She added that this has restricted mobility for current tenants and made it more difficult for prospective tenants to secure housing.
Bourassa-Ochoa noted that record growth in rental supply has helped slow average rent increases and brought vacancy rates closer to the historic average, emphasizing the importance of increased supply in improving affordability.
Toronto experienced the lowest rent growth among major CMAs, with average rents increasing by 2.7 percent in 2024, a significant drop from 8.8 percent in 2023.
Rising vacancy rates and the lowest tenant turnover rates among major CMAs led landlords to adopt a cautious approach to rent increases, prioritizing tenant retention.
In Montréal, record-high rental apartment completions pushed vacancy rates higher. Vancouver also saw rental supply grow above historical levels, though at a slower pace than in previous years.
Despite these increases, both cities continued to experience strong demand, limiting the decline in rent growth compared to Toronto.
Calgary led all major urban centres in rent growth, driven by migration-led population growth and stable economic conditions, despite higher unemployment rates. While rent growth in Calgary slowed significantly from previous years, it still outpaced other large markets.
Halifax saw significant relief in rental pressures, as slower population growth and strong rental supply contributed to a vacancy rate of 2.1 percent in 2024.
This market also recorded the largest year-over-year decrease in average rent growth, falling to 3.8 percent from 11 percent in 2023.
Meanwhile, Ottawa and Edmonton experienced slight accelerations in rent growth in 2024. This was primarily driven by higher rent increases for new tenants and turnover rates, as well as newly completed units entering the market.
