For the first time since before the pandemic, Toronto’s purpose-built apartment vacancy rate has hit 3%. CMHC’s 2026 Mid-Year Rental Market Update shows vacancy and turnover increasing across most rent quartiles in the city, even as pressure stays tight at the bottom end of the market. For GTA landlords who got used to near-zero vacancy and steady rent growth through 2022 and 2023, this CMHC rental market Toronto data marks a real shift in conditions.

What CMHC’s Mid-Year Update Found

Rent growth has slowed sharply. CMHC’s data shows overall rent growth cooling from a 9.1% spike in 2023 to just 3.2% in 2025, as increased tenant turnover lets units reprice — but not nearly as aggressively as during the tightest years of the market. The story isn’t uniform across unit types, either: 2-bedroom rents actually ticked up slightly as turnover allowed landlords to reset to higher market rates, while studio and 1-bedroom rents slowed more noticeably, largely because of new supply from condominium apartments being rented out by individual investors. Toronto stands out nationally as a market where slower rent growth, driven by higher supply, combined with strong wage growth to produce a genuine improvement in affordability for renters.

What This Means for GTA Landlords and Investors

A 3% vacancy rate is still historically low by most standards, but the direction of travel matters. Landlords who’ve grown used to multiple applicants per listing and minimal marketing time should expect slightly longer vacancy periods between tenants and less room to push rents at turnover, particularly on smaller units competing with newer condo rentals. That said, even small increases in vacancy can meaningfully reduce average rent pressure, so this isn’t a market in freefall — it’s a rebalancing. For investors weighing a rental purchase in the GTA right now, cash flow assumptions built on 2022-2023 rent growth rates need a hard second look.

Kevin’s Take

I’m seeing more investor clients ask whether now is still a good time to buy a rental property in Toronto, Mississauga, or Brampton, and the honest answer is that the math has changed. Financing costs, realistic rent projections, and your exit strategy all need to be stress-tested against this softer rental environment, not the market that existed two years ago. That’s exactly the kind of conversation worth having with a broker before you commit to a rate or a property.

Buying or refinancing a rental property in the GTA? Contact KSD Mortgages for a free consultation at 647-802-3738 or application@ksdmortgages.com.