Canada’s rental-housing market has come a “critical transition point,” according to a new national report.

Liv.rent has released its 2026 Canada Rental Market Trend Report, providing an analysis of rent trends, migration shifts, construction activity and forward-looking supply risks across major Canadian cities.

After years of intense competition, the report says, Canada’s rental market entered a stabilization phase in 2026. National vacancy rose to 3.1%, immigration declined 18% year-over-year, and landlords increasingly turned to incentives — reflecting easing pressure on renters and a decline in renter frustration over high rents.

However, the report warns a new imbalance may be forming beneath the surface.

While demand pressures have eased, housing-start activity is weakening in key high-rise markets. In 2025, apartment starts fell 80% in Toronto and 7% in Vancouver. At the same time, project cancellations surged between 2022 and 2024, with cancelled units increasing fivefold in Toronto and tenfold in Vancouver. Given multi-year development timelines, the current decline in starts risks creating a renewed supply shortfall within the next two to three years, according to the report.

“[This year] may feel more balanced for renters, but current construction and cancellation trends point to reduced supply later this decade,” said Matisse Yiu, head of marketing at liv.rent. “Even under moderated immigration targets, falling construction activity could set up renewed rental tightening by 2028–2030.”

Among the key findings, the report notes that demand is cooling, with immigration down 18% year-over-year and Canada recording a net loss of 290,392 non-permanent residents.

Renters are regaining leverage, with national vacancy at 3.1% and landlords increasingly offering incentives to attract tenants.

The report also highlights that today’s construction slowdown could fuel tomorrow’s shortage, particularly in high-rise supply in Toronto and Vancouver.

AI adoption in the rental sector remains in its early stages. Only one in six renters and landlords use AI tools, though 74% of landlords report time savings, while renter experiences are mixed.

The report concludes that while conditions are cooling today, the market remains vulnerable to renewed supply pressure within the next two to three years if construction activity remains subdued, a shift it says is critical for investors, operators, policymakers and renters to understand.

Vancouver-based liv.rent bills itself as Canada’s safest rental platform, ensuring trust and security through multi-layered verification processes. In addition to providing automation tools for renters and landlords, the company actively combats rental scams by offering free educational resources and real-time market insights. Liv.rent also furnishes monthly rent reports for Vancouver, Toronto, Montreal, Calgary, Edmonton, and Winnipeg, providing in-depth data to help renters and landlords navigate the market with confidence.