Canada’s largest rental markets are all adjusting to softer rents and more cautious underwriting, but investors in Vancouver, Toronto, Montreal and Alberta are making very different bets on where value now sits.

The slowdown is widespread. Rentals.ca reported asking rents in June were down year over year in all six of Canada’s largest markets, including 5.6% in Calgary, 4.1% in Vancouver and 1.9% in Toronto. CMHC reported Vancouver’s purpose-built apartment vacancy rate reached 3.7% in 2025, its highest level in more than 30 years — part of a softer backdrop that panellists said has translated into a particularly sharp reset in asset values.

“The highest and best use is now flipped back to the apartment building,” said Goodman Commercial principal Mark Goodman.

Goodman described older rental properties that only a few years ago commanded substantial premiums because buyers expected to redevelop them at higher density. He pointed to one Vancouver property that had carried an estimated $23-million redevelopment value but ultimately sold for $10.64 million based on its existing apartment use.

If Vancouver shows what happens when redevelopment value disappears, Toronto is showing another side of the reset: softer rental conditions have not kept institutional capital on the sidelines.

GTA multifamily sales reached $569M across 20 transactions in the first quarter, up nearly 229% from a year earlier, according to Colliers, while average pricing was essentially unchanged at $289,047 per suite.

JLL executive vice-president Michael Betsalel said the adjustment should not necessarily be viewed as a temporary downturn before conditions return to their previous highs.

“When is things coming back? And I’m like, back to what is the question?” Betsalel said, referring to expectations for a return to ultra-low borrowing costs and double-digit rent growth. “This is normal.”

In that more normalized environment, some institutions that had been developing rental housing are instead finding opportunities to acquire newer properties near replacement cost, Betsalel said, avoiding the risk and time required to build comparable assets.

While Toronto’s institutional buyers are adjusting how they deploy capital, Montreal’s market is being supported by a different source of liquidity.

PMML principal partner Thierry Samlal said deep pools of private capital continue to support transactions in older and value-add properties.

“I don’t think that we’re in a cycle,” Samlal said. “I think that we’re in a new market.”

Alberta presents yet another version of the reset, with supply rather than a shortage of capital shaping the near-term market.

Avison Young senior vice-president Brandon Imada said new rental supply is putting more pressure on recently delivered buildings, while population and employment growth continue to support longer-term demand.

None of that, however, amounted to a retreat from the asset class.

Imada pointed to durable rental demand and access to CMHC-insured financing, while Goodman argued Vancouver’s repricing has created opportunities for long-term buyers.

Betsalel put it simply.

“People need their home,” he said. “If you have a 100,000-square-foot warehouse and your widget manufacturer goes out of business, you’re stuck.”

Apartment vacancies, by contrast, can generally be replaced one unit at a time, limiting the income shock when tenants leave.