theANNUAL National 2025 - Canadian Apartmen Report

Canadian Apartment Industry Report

Canadian Multifamily Market: Momentum Slows, Uncertainty Builds

Which direction will the apartment market go following its years of exceptional growth? Canada’s multifamily sector is showing early signs of stabilization as vacancy rises and rent growth moderates. Supply continues to expand, but economic forces — from infation to reduced immigration — may challenge the market’s resilience in 2025.

According to the Yardi® Canadian multifamily report, the sector remains fundamentally strong but is adjusting to a new phase, highlighted by the following national averages:

• A 5.3% year-over-year increase in in-place rents, bringing the national average to $1,582.

• A 4.0% rise in new lease-over-lease rents in Q1 2025, down 240 basis points from Q4 2024.

• A national average vacancy rate of 4.0%, the highest level since 2020.

• Bachelor unit vacancy reaching a 5.8% average, with Toronto (7.7%) and Calgary (7.1%) leading all Census Metropolitan Area (CMAs).

While demand for rentals remains healthy, affordability challenges and shifting demographics are creating new uncertainties. Slower population growth, elevated development costs and global economic pressures are setting the stage for a more measured pace of growth across the country.

Canadian Apartment Industry Report

Pressure points begin to emerge

Several indicators suggest the Canadian multifamily market is shifting gears. While demand remains steady, macroeconomic challenges are testing the sector’s resilience:

• A national economy under stress, with GDP growth expected to slow amid rising infation and trade uncertainty.

• Unemployment ticking up to 6.7% in March 2025 following the loss of 33,000 jobs.

• U.S.-imposed tariffs impacting Canadian exports and weighing on business confdence.

• A planned reduction in immigration, with population growth falling to 1.8% in 2024 from 3.1% in 2023.

Despite these developments, the Yardi report suggests the market is recalibrating — not retreating. Rent growth is easing, vacancy is rising, but demand fundamentals remain largely intact.

Development catches up — for now

For years, Canada’s housing supply lagged behind demand. That gap is fnally narrowing. Apartment completions reached 84,273 units in 2024, marking a 32.4% increase year-over-year. Alberta led with a 108.5% jump, outpacing Ontario and Quebec.

This new wave of supply is starting to rebalance overheated markets. In Calgary — a city that saw 12% rent growth in early 2024 — new lease rent growth turned negative by Q1 2025, falling to -0.1%. Similar slowdowns are visible in other growth-heavy CMAs like Kitchener-Cambridge-Waterloo.

Still, structural barriers persist. High construction costs, zoning delays and labour shortages continue to limit new housing across many regions.

Vacancy climbs, renter behaviour shifts

For the frst time in years, national vacancy has meaningfully increased, hitting 4.0% in Q1 2025. Bachelor units led the rise at 5.8%, with vacancy in Toronto (7.7%) and Calgary (7.1%) outpacing the national average. Despite this, annual turnover remained low at 23.4%, a sign that renters are staying put in a high-cost environment.

Canadian Apartment Industry Report

A market in transition — not retreat

Multifamily remains a stabilizing force in Canada’s housing system. Federal and provincial governments continue to introduce incentives aimed at improving affordability and increasing construction, including the Housing Accelerator Fund and development charge exemptions.

While 2025 may bring more moderate growth, Canada’s multifamily outlook remains solid. With supply fnally catching up in some regions and long-term demand supported by urbanization and rental affordability, the sector is poised for continued relevance — even as the pace of change slows.

Yardi® Canadian multifamily report

In-Place Rent Growth: The year-over-year percentage increase in average monthly rents for all occupied units, including new leases, renewals and continuing leases.

Lease-Over-Lease Rent Growth (New Leases): The change in rent between a new lease and the previous lease for the same unit. This metric refects market-level pricing trends for vacant, re-leased units.

Vacancy Rate: The percentage of all rental units that are unoccupied and available for lease at a given time.

Turnover Rate: The percentage of renters who moved out of their units within the past 12 months.

Digital Prospects Per 100 Units: The number of prospective renters who frst contacted a property through digital sources, scaled to a 100-unit benchmark. Digital sources include websites, online listings, classifed ads, social media and ratings platforms.

Digital Prospect Conversion Rate: The percentage of digital prospects who ultimately signed a lease at the property they inquired about.

CMA (Census Metropolitan Area): A geographic area with a core urban population of at least 100,000, used for regional comparisons.

The data in this report includes 5,700 professionally managed properties representing over 499,000 private rental units across Canada.