The fundamentals of Canada’s rental housing market are showing signs of strain, Yardi says in its Q2 Canadian National Multifamily Report. But one bright spot is the increasing amount of new supply entering the market.

The real estate software company's report, issued Tuesday, found the national apartment vacancy rate rose to 5.1 per cent in Q1, up 110 basis points year-over-year. It marks the ninth consecutive quarterly increase, driven by lower immigration and weakness in the leasing of bachelor units.

The average national in-place rent (monthly rent per unit for all leases) increased by $8 to $1,761 in Q1 2026. At the same time, the annual growth rate fell by 50 basis points from Q4 2025 to 2.7 per cent, the lowest in four years.

The Halifax market led Canada for in-place rent growth at six per cent year-over-year, followed by Montreal at 3.7 per cent and Winnipeg at 3.5 per cent. Calgary was the only metropolitan area with a lower in-place rent, down two per cent.

Yardi noted economic uncertainty, weak jobs growth and a decreasing population as stressors on the multifamily market.

On the other hand, the federal government’s initiatives to raise multifamily supply are showing signs of success, Yardi said. In the 12 months ended November 2025, completions in Canada rose by 22.3 per cent to 171,000.

"Vacancy is rising, new lease rates are negative in most markets and the renter population is shrinking," Peter Altobelli, vice president and general manager of Yardi Canada, said in a release. "These are real signals that the market is shifting quickly, and the window for the industry to adapt is now.”

The Yardi report draws on data from 6,400 properties, representing over 571,000 private rental units across Canada.

New lease rent growth was negative overall

Yardi found the lease-over-lease rate (new leases on units that had been vacated by previous tenants) fell by one per cent in Q1. Concerns over the economy and affordability weighed on consumers, it said.

In eight of the top 12 census metropolitan areas (CMAs), new lease rates dropped by one per cent on a year-over-year basis. The biggest decrease was in Kitchener-Cambridge-Waterloo (five per cent). Vancouver (3.6 per cent), London (three per cent), Toronto (2.6 per cent) and Calgary (2.4 per cent) were next.

New lease rates rose in Halifax and Hamilton at 1.6 per cent and Ottawa–Gatineau at 0.7 per cent, while being flat in Winnipeg.

For renewals, the average national lease rate rose 2.7 per cent in Q1.

The highest vacancy rates were in Calgary (7.3 per cent) and Edmonton (6.2 per cent), followed by Kitchener–Cambridge–Waterloo and Saskatoon, both at 5.9 per cent. Halifax (2.8 per cent) and Winnipeg (3.5 per cent) were at the bottom of the list for vacancy rates.

Tenants had stayed in their apartments for an average of 40 months in Q1, up from 38 months a year ago. The longest stays were in Hamilton and Toronto at 53 months, followed by London at 44 months. Tenants in Saskatoon, Calgary and Edmonton were the quickest to move out at 24, 27 and 29 months, respectively.

Apartment starts, completions climbing

In a positive sign for apartment starts, Yardi said the metric increased almost 10 per cent year-over-year, citing data from Common Sense Economics and the Canada Mortgage and Housing Corporation.

Alberta led Canada in apartment starts growth, with an almost 30 per cent increase from February 2025 to 2026, hitting 26,732 starts. Quebec was next at 25.9 per cent increase to 45,197 starts. Montreal led CMAs in growth with a 44 per cent increase to 24,353 starts.

The increase in starts was limp in Ontario at 3.2 per cent to 43,377 starts. Starts fell in British Columbia by 1.7 per cent to 33,638. High development fees, Yardi said, are an obstacle in both provinces.

But completions were stronger for British Columbia, where deliveries of apartments climbed 43 per cent to 38,596. Quebec was another leader with deliveries rising 31.1 per cent to 42,546. Completions were up slightly in Alberta and Ontario, which rose 6.5 per cent to 21,933 and 4.1 per cent to 48,816, respectively.

Toronto led the CMAs in supply growth from February 2025 to 2026. But the delivery of 26,798 apartments during the period was smaller by 5.4 per cent on a year-over-year basis. There were 24,686 apartments delivered in Vancouver, up 25 per cent year-over-year.

Montreal and Calgary experienced declines in deliveries. Montreal’s deliveries were 20,039 apartments, a 0.2 per cent decrease. Calgary’s deliveries were 11,886 units, an 11.5 per cent decline.