What Is the Vacancy Rate in Real Estate?

What “low” vs. “high” actually means

• Below 2%: very tight; multi-application situations on quality units.
• 2–3%: tight; landlord-favourable.
• 3–5%: balanced.
• Above 5%: tenant-favourable; landlords compete with concessions.

What CMHC measures — and what it doesn’t

CMHC’s vacancy rate measures purpose-built rental buildings — not condos rented by individual investors. Toronto’s effective rental market is heavily condo-dominated, which the headline number understates. Look for both the CMHC purpose-built figure and the condo rental data for a complete picture.

How vacancy connects to investment underwriting

Investors use a vacancy assumption in NOI calculations — typically 3–5% of gross rent in soft markets and 1–3% in tight ones. Underestimating vacancy is one of the most common rental underwriting errors.

Where to find current data

CMHC’s annual Rental Market Report (released each January with year-end data) is the authoritative source. Toronto-specific real-time vacancy is harder to measure; brokerage-published condo rental reports fill some of the gap.

Frequently Asked Questions

Is Toronto’s vacancy rate high or low?

It’s historically been low. Recent supply increases and slower migration have softened parts of the market — check the latest CMHC figure.

Does vacancy affect rent control?

Indirectly. Ontario’s rent-control rules apply to most existing tenancies; vacancy turnovers allow rents to reset to market.

How do I find local data?

CMHC’s Rental Market Report breaks down by metro and submarket. For Toronto condo rentals specifically, brokerage research reports are more granular.