Metro Vancouver rental housing vacancy rate hits 30-year high | Daily Hive

Metro Vancouver rental housing vacancy rate hits 30-year high amid new supply and sluggish demand

The 2025-built Signal rental housing towers next to SkyTrain's Marine Gateway Station in South Vancouver. (Intracorp Homes/Oxford Properties)

A wide range of factors have led to Metro Vancouver’s secured purpose-built rental housing vacancy rate reaching the highest level in over 30 years.

According to a new report by Canada Mortgage and Housing Corporation (CMHC), the region’s secured purpose-built rental housing vacancy rate reached 3.7 per cent in 2025. This is well above CMHC’s projections of a vacancy rate of between 2.1 per cent and 2.4 per cent.

It is also a one-year steep increase from the 1.6 per cent vacancy rate in 2024, and below one per cent in 2023, 2022, and before the pandemic.

Meanwhile, the unsecured condominium apartment rental housing vacancy rate in 2025 reached 1.5 per cent, with average two-bedroom rents at $2,900.

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Average rents went slightly up to $2,363 for a two-bedroom unit in a secured purpose-built rental housing building and $2,900 in an unsecured condominium apartment, but this was generally a slower increase than previous years.

In fact, the rate of rent growth has slowed to a 20-year low, and it even fell below the Government of British Columbia’s maximum allowable annual rent increase of three per cent for 2025, which suggests many landlords chose not to raise rents for existing tenants amid growing competition from increased newly-built supply and falling demand.

“Filtering effect” is working

Rent increases on unit turnover were also noticeably lower, reinforcing signs of a shift toward a renter’s market. Property operators, particularly in newer buildings, have increasingly offered incentives such as one to two months of free rent to offset longer lease-up periods.

Rental turnover rose across all unit types in 2025, continuing a trend that began last year. Turnover was highest in newer concrete and upscale buildings, where higher rents have given tenants greater incentive to explore alternative options.

CMHC notes that this amounts to the “filtering effect” working, when newly-built supply provides individuals and households with more options. Homes gradually become available to lower-income households as newer units are built and higher-income households move into these.

“Rising vacancy and turnover rates, along with new rental supply, showed that tenants were moving more frequently, creating a filtering effect. Rental operators reported that many renters took advantage of the opportunity to move into homes that better matched their preferences,” states CMHC.

Despite these changes, affordability challenges remain acute. Vacancies for units affordable to lower-income households stayed extremely limited, at just one per cent to two per cent. Families seeking two-bedroom or larger units continue to face the most severe constraints.

Vacancy rate could shrink in the coming years due to construction challenges

Unsecured condominium apartments driven by individual private investors remain a very substantial part of Metro Vancouver’s overall rental housing supply, and for decades have accounted for the overwhelming majority of new rental housing supply built — up until the last few years. While vacancy rates for these units increased, they remained lower than those for secured purpose-built rental housing, largely due to the flexibility of individual owners who rely on rental income to cover financing costs.

The share of newly completed unsecured condominium apartments entering the rental market climbed again this year, nearing recent highs and extending a decade-long trend. A sluggish resale market has pushed more existing condominium units — particularly within the city of Vancouver — into the rental pool.

Looking ahead, developers warn that continued weakness in condominium pre-sales could further reshape the overall rental housing market. Some in-progress strata market ownership condominium projects may be converted into secured purpose-built rental housing to avoid holding unsold inventory, potentially adding even more supply to a market that is already loosening.

Furthermore, a growing number of secured purpose-built rental housing developments are increasingly struggling, with many proposed and shovel-ready projects facing suspension or cancellation. These challenges stem from escalating construction costs for materials, equipment, and labour, as well as persistently high interest rates that increase borrowing costs to cover construction expenses.

Fewer projects getting underway today will affect vacancy rates and affordability levels in the years ahead, when these developments would otherwise have been completed and ready for occupancy.

The surge in newly completed supply entering occupancy and market listings in 2025 and 2026 are projects that began years earlier, some even before the pandemic. With the current trends, there is a risk that the wave of completions will be cut short beyond 2026.

Downtown Vancouver seeing renewed rental housing demand

While rental housing demand has been supported in parts of the downtown Vancouver peninsula by return-to-office and hybrid work policies, vacancies across much of the region have climbed to or exceeded previous highs. Downtown Vancouver continues to perform relatively better than other areas, with vacancy rates remaining below pandemic-era peaks. However, in many neighbourhoods outside the city centre, renters are finding more choice than they have had in years.

In Burnaby, vacancy rates rose sharply, particularly in the rapidly developing Brentwood area, where a wave of newly completed condominium apartments entered the market. New secured purpose-built rental projects in Edmonds and Metrotown also contributed to higher vacancies across the city.

Similar trends are emerging in other suburban municipalities. In Coquitlam, rental inventory increased by the largest amount in 20 years, while Burnaby reversed a five-year decline in rental stock as major developments reached completion. Surrey also saw significant rental growth, though leasing challenges have emerged as new secured purpose-built rental housing compete with recently completed condominium apartments and conversions.

In some suburban centres, a heavy concentration of studio and one-bedroom units has limited appeal, contributing to elevated vacancy rates that are expected to persist in the coming years.

Demand has also been affected by broader demographic and policy changes. The federal government’s recent measures reducing the intake of new non-permanent residents, including international students and temporary workers, have softened rental housing demand across the region. B.C. recorded three consecutive quarters of net outflows of non-permanent residents, most of whom were renters.

At the same time, higher youth unemployment and slower wage growth have reduced demand for smaller units. Many young professionals are opting to live with roommates or remain with family, further easing pressure on the rental market.

The young adult population fell the most in B.C. and Ontario, which are major destinations for international students.

With provincial population growth slowing sharply due to declining international migration, CMHC anticipates vacancy rates to remain elevated in the short term.

Similar conditions and factors have also led to Greater Victoria’s highest secured purpose-built rental housing vacancy rate since 1999, reaching 3.3 per cent in 2025. As well, the unsecured apartment rental housing vacancy rate hovered at only 0.3 per cent.

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