Vacancy Rates by Ontario City: Where Units Sit Empty and Where They Don't

In the latest CMHC survey, Toronto's purpose-built vacancy rate hit 3.0% — a level it hadn't touched since before the pandemic. Ottawa reached about 3.0% too. Every headline read it the same way: the market is loosening. And it is. But a vacancy rate is the most misread number in a landlord's toolkit, and "loosening" is only half the story.

Here's the trap. A rising rate doesn't mean "avoid this city," and a very low one doesn't mean "buy here." The same number can signal healthy demand or an affordability crunch with nowhere to move; genuine softness or a temporary wave of new supply still leasing up. Read it wrong and you either overpay for a "tight" market that's actually stuck, or you walk away from a good building because a headline number scared you.

This data page gives you the current vacancy picture across Ontario's major markets — and, more usefully, teaches you to read it the way it's actually built: purpose-built versus condo, vacancy versus availability, new stock versus old, and the city average versus the spread underneath. Because what a vacancy rate actually tells you isn't where to buy. It's how fast you'll fill a unit, and how much rent-setting leverage you'll have when you do. This is general market information, not investment advice; figures are dated July 2026, drawn from CMHC's latest Rental Market Survey, and should be refreshed on each release.

What a Vacancy Rate Actually Measures — and the 2025–26 Loosening

Start with the definition, because it's narrower than most people assume. CMHC's headline vacancy rate is the share of purpose-built rental units — buildings constructed specifically to be rented — that are empty and available for rent at the time of the survey. It doesn't capture every rented condo or basement suite (those are the "secondary market," measured separately). And it's a snapshot, taken once a year.

So what does it actually tell a landlord? Two things worth caring about: how fast you'll be able to fill a unit, and how much leverage you'll have to set the rent when you do. A tight market fills fast and prices firm; a loose one takes longer and pushes you toward incentives. That's it. It is a gauge of lease-up speed and pricing power — not a verdict on whether a city is a good place to own.

The current picture is a genuine turn. The tight conditions that defined 2022–23 loosened through 2025, as historically high purpose-built completions met weaker demand — slower population growth, declining immigration, fewer international students, and a dose of economic caution. Toronto's purpose-built vacancy rate hit 3.0% for the first time since the pandemic; Ottawa reached about 3.0%. For national context, Vancouver climbed to 3.7%, its highest since 1988, while Calgary held roughly steady despite heavy new supply — proof that vacancy is a local story, not a national one. CMHC expects rates to stay elevated heading into 2026.

Before you compare any two of those numbers, one correction that trips up almost everyone. The old rule of thumb that "3% means a balanced market" is not universal — CMHC has said so directly. Three percent is a reasonable balanced level for Vancouver, but the benchmark sits closer to 4% in most markets and above 5% in Alberta. Measure a city against its own balanced level, not a number you absorbed reading about somewhere else. A 3.5% rate can be "still tight" in one market and "soft" in another. This is the same discipline behind our cap rates and average rents by Ontario city data page and the best Ontario cities to buy a rental pillar: the number only means something once you know how it's built.

Read It Two Ways — Because the Same Rate Tells Two Stories

This is the whole discipline in one habit: whenever you see a vacancy rate, ask why it's where it is, and which segment it describes. The rate itself is neutral. The story underneath it is what you're actually underwriting.

A rising rate is often a lease-up wave, not decay. When CMHC looked under Ontario's 2025 increase, it found vacancy concentrated in buildings built after 2020 and in units near post-secondary institutions, while older stabilized buildings and family-sized units stayed tight. New units are taking longer to fill — months, in some cases — partly because a surge of investor-owned condos, many that couldn't sell, are being rented out and competing with new purpose-built supply. So a scary headline rate frequently means new, higher-priced stock still absorbing, while the older two- and three-bedroom stock a lot of landlords actually own is as hard to rent as ever. That new-supply competition is the same oversupply pressure we flagged in where NOT to buy a rental in Ontario — showing up here first, in the vacancy data.

A very low rate can be an affordability crunch, not health. Ottawa is the cleanest illustration going: its newest units sat at 6.7% vacancy while its lowest-rent units stayed under 1%. That sub-1% isn't a sign that segment is thriving — it's that tenants there have nowhere affordable to move, so they don't. Low vacancy with weak demand growth underneath is a stuck market, not a green light. A rate near zero tells you units are full; it doesn't tell you the demand is healthy or growing.

Two quick illustrations of how the misread plays out. The 3% that scared off a good buy: a landlord watches a city's rate climb from 1.8% to 3.2% and reads "collapse" — when in fact it's a wave of post-2020 towers leasing up while the older two-bedroom family stock they were targeting still sits under 2%. The sub-1% that wasn't healthy: an investor chases a market's rock-bottom lowest-rent vacancy as "strong demand," when it's really an affordability crunch with thin in-migration behind it. In both cases the fix is the same — read the spread, not the headline.

The Three Numbers Behind the Number

Once you're asking the right questions, the next step is knowing which number a source is actually quoting. "Vacancy" gets used loosely to mean three different things, and they can tell opposite stories about the same market.

Vacancy rate vs availability rate

The vacancy rate counts units that are physically empty now. The availability rate is broader — it counts units that are vacant or currently listed for rent even while still occupied, which captures turnover that's about to happen. That makes availability more forward-looking. In Toronto, the availability rate has been rising faster than the vacancy rate, which CMHC reads as a sign of increasing tenant turnover before it shows up as empty units. If a source quotes an "availability" figure, it's telling you where the market is heading; watching it climb is your cue to sharpen pricing and incentives before your unit ever sits empty.

Purpose-built rate vs secondary (condo) rate

Condos rented out on the secondary market usually show lower vacancy than purpose-built apartments — not because they're better bets, but because individual owners behave differently. An owner with one condo and a mortgage to cover will cut the asking rent rather than eat an empty month. Large purpose-built operators manage whole portfolios; they can carry some vacancy while holding pricing discipline. Two numbers, two behaviours. If you're buying a condo to rent, the secondary-market reality — flexible pricing, fast lease-ups, thinner margins — is your real benchmark, not the purpose-built figure that makes the headlines.

City average vs the spread

A single CMA average blends brand-new towers with tight older stock, downtown with suburb, bachelor units with three-bedrooms, and the cheapest quartile with the priciest. Ottawa's 6.7%-new-versus-under-1%-lowest-rent is the same city on the same day. Never underwrite a specific unit on a city-wide average — pull the sub-market, building-age, and bedroom-type breakdown for the actual unit you're buying. Pair this with our average rents by bedroom count page and you can line up "how full is this segment" against "what does it rent for" — the two questions that actually drive a lease-up.

What Vacancy Does to Your Pricing Power

The payoff for reading vacancy correctly is that it feeds directly into pricing power. Low turnover in a rent-controlled market quietly builds a gap between what a sitting tenant pays and what a vacant unit can command. In Toronto, that vacant-versus-occupied gap on two-bedroom units reached 44% in 2024 — the widest among major Canadian cities — while Edmonton, with no rent control and high turnover, sat at just 5%. Vacancy, turnover, and the rent-control regime aren't three topics; they're one system. When a long-occupied, rent-controlled unit finally turns over, the lease-up can reset sharply higher — that's the reward for the low turnover a tight market produces.

But read the current moment carefully, because it cuts the other way too. In a loosening market, new-lease rents have actually fallen in several Ontario markets — one widely cited market tracker put fourth-quarter 2025 new-lease growth negative in Kitchener–Cambridge–Waterloo, Toronto, and Hamilton, against roughly flat nationally — and landlords have been offering incentives reported as high as several months of free rent to fill new supply. So a vacant unit today may lease for less than the "asking rent" headlines suggest. Budget realistic lease-up time and real incentives into your numbers, not the top-of-market advertised figure.

The number sets your leverage; the rules decide how much of it you can actually capture. The 2026 provincial guideline is 2.1%, applied with a proper N1 and 90 days' notice; units first occupied after November 15, 2018 are exempt from the guideline and use the N2 — which is exactly the newer stock driving much of the new-supply vacancy. Deposits are last-month's-rent only, there are no legal late fees, and NSF charges are capped at $20. You can model the in-tenancy increases with our Ontario rent increase calculator. Vacancy tells you how much room you have to price; these rules tell you what you're allowed to do with it.

Key Takeaways: Reading Vacancy Like a Pro

Seven moves that turn a vacancy rate from a headline into a working tool:

1. Stop reading the headline rate as a verdict. Ask why it's where it is and which segment it describes before you react.
2. Measure each city against its own balanced benchmark — roughly 3% for Vancouver, closer to 4% for most markets, 5%+ in Alberta — not a borrowed universal 3%.
3. Check the availability rate alongside the vacancy rate. When availability rises faster, turnover is coming — an early signal to sharpen pricing.
4. Match your deal to the right number. Purpose-built and condo secondary-market vacancy behave differently; compare against the one you actually compete with.
5. Ignore the city average; pull the spread. Building age, bedroom type, and rent quartile move separately within one city.
6. Budget real lease-up time and incentives in a loosening market — not the advertised asking rent.
7. Re-check on each CMHC release. Vacancy, availability, and turnover move every survey; pull the current figure before you rely on it.

Quick win: before your next offer, look up the specific CMA's purpose-built and availability rates plus the newest-versus-oldest-stock spread — not just the one number in the news. Long game: the landlord who treats vacancy as a pricing-power gauge fills units faster and prices them right in any market, tight or soft. If you're weighing markets, our cheap Ontario cities cash-flow guide shows why a very low small-market vacancy still needs its demand story checked.

The Bottom Line

A vacancy rate is a gauge, not a verdict. Ontario loosened in the latest CMHC survey — Toronto to 3.0%, Ottawa to about 3.0% — but that number only helps you once you read it the way it's built: purpose-built versus condo, vacancy versus availability, new stock versus old, city average versus the spread, and against that city's own balanced level rather than a borrowed 3%. A rising rate is often new supply still leasing up while family units stay tight; a very low rate can be an affordability crunch, not strength. What vacancy actually tells you isn't where to buy — it's how fast you'll fill a unit and how much rent you'll be able to set when you do. Read it right, and it becomes one of the most useful numbers you own.

Related Resources

• Best Ontario Cities to Buy a Rental Property in 2026 — the pillar that frames every market-selection question.
• Cap Rates and Average Rents by Ontario City — the data-page sibling; read vacancy and cap rates together.
• Average Rents by Bedroom Count in 10 Ontario Cities — pair "how full is this segment" with "what does it rent for."
• Where NOT to Buy a Rental in Ontario — the demand-headwind and oversupply red flags behind rising vacancy.
• Do Cheap Ontario Cities Actually Cash-Flow? — why a very low small-market vacancy still needs its demand story checked.
• Ontario Rent Increases 2026: The Complete N1 Guide — the 2.1% guideline and the exemption that decide how much of the turnover gap you can capture.
• Ontario Rent Increase Calculator — model the maximum legal increase on your unit.

This article is general market information for Ontario landlords and investors, current as of July 14, 2026. It is not investment, financial, tax, or legal advice, and it does not recommend where to buy or avoid. Vacancy, availability, and turnover figures are from CMHC's Rental Market Survey and Mid-Year Rental Market Update (latest available); new-lease and asking-rent figures are attributed market-participant estimates. All figures change with each CMHC release — verify current numbers for your specific market and consult qualified professionals before making decisions. Source: CMHC, Rental Market Survey and Mid-Year Rental Market Update, 2025–2026.