For the first time in years, the rental market in Canada is not running away from tenants. Vacancies are up, asking rents have eased in several major cities, and CMHC’s 2026 Housing Market Outlook expects this softer market to stick around for the next few years.
For small landlords, it means a change in what wins.
When tenants had much less choice, listings could be sparse and replies could be slow. In 2026, the basics matter more. Clear pricing, honest listings, quick responses, fair screening, and rent collection that does not feel like a chore. None of that requires you to act like a big property management company. It just requires the rental to feel cared for.
Quick answer / Key takeaways
- Canada’s purpose-built rental vacancy rate rose to 3.1% in 2025, up from 2.2% in 2024, and CMHC expects the softer market to continue through 2026 to 2028.
- In Q3 2025, average asking rent for a two-bedroom apartment fell year over year in 24 of 40 census metropolitan areas, including Toronto (-3.9%) and Vancouver (-5.9%).
- For small landlords, this means competing on the tenant experience, not on price alone.
- Tools like Pendo and PendoPay help keep applications, rent payments, receipts, and ledgers organized in one place, so the experience feels professional even when one person is running it.
What the 2026 outlook actually says
CMHC’s 2025 Rental Market Report found that the national purpose-built rental vacancy rate climbed to 3.1% in 2025, up from 2.2% in 2024, driven by historically high rental completions and slower population growth. Statistics Canada’s Q3 2025 data added more context. Asking rents on two-bedroom apartments declined year over year in most major markets, with Vancouver down 5.9% and Toronto down 3.9% compared to the same quarter a year earlier.
The 2026 Housing Market Outlook expects this trend to continue. CMHC forecasts elevated vacancies through 2028 in Vancouver, with the rate rising from 3.7% in 2025 to 4.1% in 2026. Nationally, the agency expects rental markets to move toward balance as new supply outpaces demand and immigration slows. Rent growth on existing tenancies is forecast to stay close to zero, and turnover rent growth will keep cooling.
Affordability is not solved. Average rents are still high relative to incomes, especially in BC and Ontario. But for the first time in years, tenants who are moving have real options. Landlords are competing for them, not the other way around. That is the market most small landlords will be operating in for at least the next two years.
Why small landlords still have something to offer
Large purpose-built rental operators have responded by offering one month free, moving allowances, and signing bonuses. A small landlord usually cannot match those incentives. But tenants comparing units are not only weighing dollars.
They are weighing the experience. Whether the landlord replies same-day or three days later. Whether the listing answers their questions or leaves them guessing. Whether move-in feels organized or improvised. Whether rent payments come with a receipt or a thank-you text.
A tenant signing a lease is not only choosing a unit, they are choosing the person they will deal with every time something breaks, every time rent is due, and every time a question comes up. Small landlords can win that comparison by being clearer, faster, and easier to deal with than the building down the street. We covered some of this in our post on communicating with tenants, and the principles apply double in a softer market.
Pricing in a softer market
The most common mistake right now is pricing based on what similar units rented for in 2023. That market is gone. Asking rents in Vancouver are down nearly 6% year over year. Toronto is down nearly 4%. Even in markets where prices are still climbing (Saskatoon, Winnipeg, parts of Quebec), the pace has slowed.
Before listing, check three or four current listings in the same neighbourhood and bedroom count. Look at what is comparable: parking, storage, laundry, utilities, pet rules, and proximity to transit. If your rent is higher than nearby options, there should be a clear reason a tenant could point to. If there is not, a small adjustment now will almost always cost less than an extra month of vacancy later. For BC landlords, LandlordBC publishes regional context that is worth a glance before you decide.
This is especially true in Vancouver, where CMHC expects the two-bedroom market rent to grow only modestly in 2026, to roughly $2,381. Most of that growth is driven by newly completed higher-priced units entering the market, not landlords pushing rents up on individual suites.
Writing a listing tenants can trust
Tenants notice missing details. A blurry photo, a vague utility line, or an unclear pet policy creates doubt. In a softer market, doubt sends them to the next listing.
A good listing does not need to sound fancy, it needs to answer the questions tenants are already wondering about: the rent and what is included, the available date, the lease length, laundry, parking, storage, pets, smoking, and what the application process looks like. Include clear photos of every major room, not just the best one. Pendo’s rental listing tool builds out a clean listing page from a few details, which removes some of the formatting guesswork.
Honesty helps more than polish. If the suite is small, say who it suits best. If parking is street-only, say so up front. If the laundry is shared with the upstairs unit, mention it. Honest listings attract better-fit applicants and save everyone time.
Responding faster than the landlord next door
When tenants have options, slow replies are expensive. You do not have to be available all day, but you do need a system. A short acknowledgment, something like “Thanks for reaching out, the unit is still available, I’ll send next steps shortly,” is enough to keep a good applicant from drifting to the next listing.
Reusable templates for showing availability, application requirements, screening consent, move-in steps, and rent setup save real time. The goal is not to sound robotic, it is to avoid retyping the same message twenty times while qualified people move on.
Screening: clearer, not looser
A softer market is not a reason to loosen screening. It is a reason to make screening feel professional. Tell applicants up front what you need: a completed application, proof of income or employment, references, screening consent, ID where appropriate, and the expected move-in date. Keeping the process consistent for every applicant protects you and reduces the risk of unclear or unfair decisions.
Our post on the top 10 landlord reference questions is a useful starting point if you want to tighten up that conversation. Pendo’s tenant screening tools (built on Certn and Equifax) handle identity verification, credit reports, and applicant risk checks. It is also worth reviewing our piece on tenant screening laws in Canada before you finalize your application questions, since what you can and cannot ask varies by province.
Competing on convenience, not just rent
When two similar suites are listed at similar prices, the one that feels easier to live in usually wins. Convenience is rarely dramatic, it is small frictions removed.
| What tenants wonder about | What a good setup looks like |
| “Did my rent go through?” | Automatic receipts, clear payment history |
| “Where do I send rent?” | One payment method set up before move-in |
| “Who do I contact for repairs?” | Clear instructions in the welcome message |
| “What happens after I’m approved?” | A move-in checklist with dates and next steps |
| “What did we agree to?” | Lease, payments, and records stored together |
This is where digital tools earn their place. PendoPay lets landlords collect rent online through secure pre-authorized debit, with payments tracked in a clean digital ledger. Neither the landlord nor the tenant is hunting for proof of payment three months later. PAD is also the Payments Canada recommended structure for recurring payments like rent, which makes it more predictable than chasing e-Transfers every month. For landlords ready to move past spreadsheets, Pendo connects applications, screening, leases, rent collection, and reporting in one place. Our post on the cost of not using property management software digs into where the manual approach quietly costs you money.
A tale of two basement suites
Two landlords list similar one-bedroom basement suites in the same neighbourhood at almost the same price.
Landlord A posts five dark phone photos, writes “utilities extra” with no detail, replies to inquiries two days later, and asks applicants to “send documents” without saying which ones. The unit shows three times in two weeks and gets a tentative application from a tenant who keeps shopping.
Landlord B posts bright photos of every room, lists rent, utilities, parking, laundry, and transit clearly, replies the same day with a short message and an application checklist, and mentions that rent can be paid online with automatic receipts. The unit shows twice and rents to a qualified applicant within a week.
The suites are almost identical. The experience is not. That is where small landlords win in 2026.
Keeping the tenants you already have
The easiest vacancy to fill is the one that never opens. Tenant retention is mostly predictable service: responding to repair requests within a reasonable timeframe, giving proper notice before entry, keeping payment records clean, following provincial rules on deposits, rent increases, and notices, and avoiding surprise fees. Checking in before renewal season, not to negotiate, just to ask how things are going, costs nothing and tells the tenant they are not invisible.
A tenant who feels respected will often stay through a small rent difference somewhere else. They may still move for work, family, or affordability, but they will not move because the rental experience felt scattered.
Mistakes that show up more in a softer market
A few patterns turn into vacancies faster than they used to. Waiting too long to adjust a listing that is getting views but no inquiries. The photos, price, or headline are usually the issue. Treating every applicant like they have no other options, when they probably do. Offering a small rent discount without fixing the friction that is actually losing applicants. And forgetting compliance basics. Tenant choice does not change provincial tenancy law, and proper notices, legal deposits, and documented rent payments still matter.
A few common questions
Are tenants really getting more choice in 2026?
In most major markets, yes. CMHC’s 2026 outlook expects elevated vacancies to persist through 2028, with Vancouver’s vacancy rate forecast at 4.1% in 2026 and rent growth on existing tenancies close to zero. Local conditions still vary. Saskatoon, Winnipeg, and Regina are running tighter than the national average.
Should small landlords lower rent right away?
Not always. Compare your unit to current nearby listings first. If your price is high and the listing is quiet, a small adjustment will usually beat a longer vacancy. If your price is fair and the listing is quiet, the problem is more often the photos, the response time, or the description.
How long should I expect a vacancy to last in 2026?
Longer than during the 2022 to 2024 rush, but it depends on the market and the unit. CMHC reports that purpose-built rental operators are seeing longer lease-up periods, especially for newer buildings in Toronto, Vancouver, and Calgary. A well-priced suite with a strong listing and fast replies will still rent quickly. A poorly listed suite at last year’s price might sit.
This article is for informational purposes only and does not constitute legal advice. Always consult your local Residential Tenancy Branch or a qualified legal professional for advice specific to your situation.
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