Vancouver’s vacancy rate is rising — but it won’t bring relief to everyone

Vancouver’s vacancy rate has jumped from 1.6 per cent to 3.7 per cent, according to the Canada Mortgage and Housing Corporation’s 2025 rental report released in December.

This marks the highest vacancy rate since 1988, and though it was forecast for this year, this level of growth “exceeded expectations,” according to the CMHC.

The report detailed some key reasons for the shift, including record levels of rental supply and lower population growth, leading to reduced demand. Federal policy changes that reduced the number of foreign workers and students, as well as high youth unemployment (meaning they were continuing to live at home with parents) were also factors.

So what does it mean for Vancouver renters? Despite these shifts, “affordability challenges persist for lower-income households,” the CMHC report cautions.

The vacancy rate, which indicates the number of properties that are empty and available to rent in a given area, is often used as a measure of lower rent prices and increased negotiating power for renters.

“I think the places that are becoming vacant are market rentals. And the market rental vacancy may be more than three per cent when you average it out, but non-market rentals and below-market rental units are the ones that are deeply needed and in short supply, and are probably still close to a zero per cent vacancy rate,” says Robert Patterson, lawyer at the non-profit Tenant Resource and Advisory Centre.

In other words, the increased vacancy rate might offer a bit of breathing room for those who can afford to be renters, but for his clients who need low-income or shelter-rate housing, it’s still virtually “impossible” to find, adds Patterson.

One particular area of vulnerability he sees is with longer-term tenants who are terrified of moving or of being evicted because the rents for units in their city have doubled or tripled.

Another trend Patterson has noticed is that large corporate landlords like Real Estate Investment Trusts or REITs are hesitant to lower rents, even despite high vacancy rates.

“I think when you first saw the vacancy rate go up, what landlords were starting to do — before lowering the monthly rent — they were doing things like offering one month rent free, or the first two months free, those sort of one-time incentives. They want to retain that high base rent, because it means higher increases in later years,” he says.

Sustainable urban design expert Patrick Condon thinks the vacancy rate change is due to a shift in the global housing market, and is not necessarily local only to Vancouver.

“The global housing market shifted away from condominiums towards rentals for various financial reasons. This new supply was aimed at the top of the market where supply was already adequate,” Condon said, via email. 

“Unfortunately the much-touted housing supply deficit, if you look at the research, was a deficit in affordable units. For those units there is still a very low vacancy rate as that cohort cannot afford to rent this new rental supply.”

Rental units for lower-income households do remain in tight supply, according to the CMHC, with a vacancy rate of about 1 to 2 per cent.

“This is particularly challenging for families seeking two or more bedrooms. Vacancies for units affordable to households earning below the 60th income percentile remained extremely limited,” states the report.

Rental affordability also puts pressure on families even after the children are grown, says local resident Russil Wvong, who bought a townhome near Main and King Edward with his wife in 2001. He says he’s worried his children — who are 22 and 23 — won’t have that same opportunity.

“What was doable back then is completely impossible. It's not just our kids, it’s their classmates. It's their entire peer group — where are they supposed to live?” he says. 

“What we need to do is allow more housing, and yet our institutions at the municipal level seem to be set up based on the assumption that housing is unwanted, and that if you want to build housing like you should really pay through the nose. So yeah, the whole institutional assumptions seem to be in need of a major overhaul.” 

Wvong, a software developer who writes about Vancouver’s rent issues on his Substack, points to cities like Edmonton and Calgary’s fast-tracking of housing construction projects as a positive example.

A study released in March by the Canadian Home Builders Association compared a range of factors,  like new housing development application timelines and fees charged by municipalities, with its affect on housing affordability in those areas. Out of 23 Canadian cities it ranked Edmonton as first place overall and Vancouver in 17th place. 

“We regulate new housing like it's a nuclear power plant, and we tax it like it's a gold mine,” says Wvong, referencing a 2021 housing report that emerged from an expert panel headed by former NDP MLA Joy McPhail. 

“We're moving in the right direction, but if we don't see some policy changes, I would say the costs, including the cost of delay, set a floor on how low prices and rents can go,” he says.

Higher vacancy rates were also reported in other B.C. municipalities, including in Victoria where the vacancy rate rose to 3.3 per cent — its highest since 1999, according to the CMHC.

Christine Boyle, Minister of Housing and Municipal Affairs, attributed these shifts to the work done by the provincial government to cut red tape and speed up approvals for affordable homes.

“We still have more good work to do to get to a point where housing is truly affordable for everyone. Renters can’t afford to have the progress that we have achieved together undone. We can’t go backwards to the days of red tape and policies that fuelled speculation, blocked construction and drove housing costs beyond what everyday people could afford,” Boyle said in a statement on Dec. 17.

Across Canada, the average vacancy rate also rose from 2.2 per cent to 3.1 per cent and “rents stabilized in most major markets,” the CMHC report states. However, average rent growth persisted, with the average rent paid nationally by all tenants for two-bedroom units rising by 5.1 per cent over the past year.