Rents are slowing in big cities: what it means for you
📘 Related guide: Household budget: why it matters and how it helps
What happened
The Canada Mortgage and Housing Corporation (CMHC), the federal housing agency, published two reports this year. In July it said home prices are expected to decline in 2026, and that rents should slow in larger cities such as Toronto, Vancouver and Montréal as vacancy rates rise. The vacancy rate is the share of rental homes with no tenant. When it goes up, landlords compete more for renters.
In September, CMHC said Canada needs 417,000 to 469,000 new homes a year to restore pre-pandemic affordability by 2036, but current projections show about 231,000 starts a year. That leaves a gap of 187,000 to 238,000 homes every year.
The data come from CMHC reports dated July 22 and September 10, 2026. The 2026 numbers below are forecasts, not final results.
How it affects you
CMHC forecasts these 2026 averages for a two-bedroom rental:
- Vancouver: $2,398 a month, vacancy 3.6%
- Toronto: $2,120 a month, vacancy 3.8%
- Calgary: $1,948 a month, vacancy 5.9%
- Montréal: $1,405 a month, vacancy 3.8%
Calgary has the most empty rentals on that list, which usually gives renters more room to negotiate.
Example (our assumptions, not official data): a family pays $2,000 a month. A 3% increase is $60 more a month, or $720 a year. A 1% increase is $20 more a month, or $240 a year. The gap between the two is $480 a year.
The city you choose matters even more. Using CMHC's forecasts, a two-bedroom in Toronto costs $715 more per month than in Montréal ($2,120 minus $1,405). Over a year, that is $8,580.
If you want to buy, the change is small. CMHC forecasts an average resale price of $675,200 in 2026, versus $679,543 in 2025. That is $4,343 less, under 1%. It also forecasts the 5-year fixed mortgage rate at 5.2% in 2026.
What you can do
- Before your lease renews, look at what similar homes near you are asking now and compare with your rent.
- Ask your landlord for any increase in writing, and check your province's tenant rules on notice and limits.
- If you are planning a move, compare total monthly costs in different cities, including transit and utilities.
- If you are thinking of buying, ask your bank for a rate quote and run the monthly payment against your budget before you look at homes.
What to keep in mind
These are forecasts, and they can change. City averages hide big differences between neighbourhoods and building types. CMHC also warns that the shortage is large: it called Toronto's recent affordability improvement a cyclical softening, not a lasting gain, and said Montréal's cost-to-income ratio rose from 34% to 48%. So slower rent growth does not mean rents will fall everywhere. Rules on rent increases differ by province, so check your own.
Sources
- CMHC: CMHC: Fall 2026 Housing Supply Report
- CMHC: CMHC's Canada Housing Market Outlook: Summer 2026
- CMHC: Economic uncertainty to continue weighing on housing market
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Information checked against the sources listed above on October 11, 2026. Educational information, not financial, tax or legal advice.
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