Key takeaways
- CMHC says increased rental construction and slower household formation are helping move major rental markets toward more balanced conditions.
- Vacancy rates are around 3.1% nationally, with average asking rents down year-over-year in several large centres.
- Toronto, Vancouver and Montreal have seen meaningful new rental supply, especially from multi-family construction and professionally managed rentals.
- Home sales remain subdued, and CMHC expects weak housing demand and further price softness through 2026 before a gradual recovery in 2027–2028.
A cooler rental market is changing the pressure to buy
For the past few years, many Canadians felt squeezed from both sides: rents were rising quickly, home prices were difficult to reach, and waiting could feel risky. CMHC’s 2026 Mid-Year Rental Market Update points to a different environment. Increased rental construction and slower household formation are helping major markets move toward more balanced conditions, with rent growth moderating compared with 2023 and 2024.
That does not mean renting is suddenly easy or cheap. But it does mean renting is becoming less of a crisis option in many places. A separate national rental trend report cited in the brief shows vacancy rates around 3.1%, back near pandemic-era levels, with average asking rents down year-over-year in several large centres. For households deciding whether to buy now or wait, that matters.
Where the easing is most visible
The rental supply story is especially important in Toronto, Vancouver and Montreal. CMHC notes that much of the new supply is concentrated in these larger markets, where multi-family construction and new professionally managed rentals have materially expanded inventory compared with three years ago.
More rental choice can change buyer behaviour. If a renter can find a suitable home without facing extreme rent increases, they may have more time to save, compare neighbourhoods, watch local prices and avoid making a rushed purchase. That flexibility can be valuable in a market where ownership demand has also cooled.
Ownership is also moving at a slower pace
The resale market is not showing the same urgency seen in hotter cycles. National home sales remain subdued: June 2026 transactions were about 11% below the 10-year average, and CREA has downgraded its 2026 home-sales forecast to 463,336, a 1.4% decline from 2025. CMHC’s summer outlook ties weaker ownership demand to slower population growth and tighter household budgets, alongside declining home prices and lower housing starts.
For buyers, a slower market can mean less short-term pressure and, in some cases, more room to negotiate. For sellers, it may mean pricing and timing need to be more realistic. CMHC expects weak housing demand and further price softness through 2026 before a gradual recovery in 2027–2028, so the decision to buy or sell should be based on your own timeline, not just fear of missing out.
How to think through renting versus buying right now
In a more balanced rental market and a softer ownership market, the better question is not simply “Is buying better than renting?” It is “Which option gives me the right mix of stability, flexibility and financial breathing room over the next few years?”
- If renting now gives you more choice and less payment stress, waiting may be a reasonable strategy while you prepare for a future purchase.
- If you are buying, focus on a home and mortgage plan you can carry comfortably, even if prices stay soft in the near term.
- If you are selling and buying in the same market, look at both sides together: a softer sale price may be partly offset by better buying conditions.
- If your timeline is flexible, compare today’s purchase option against the value of keeping mobility and cash flow open.
This is a rare period where some Canadians in big cities may have a more genuine choice: rent and wait in a cooler market, or buy into a slower, price-softening ownership market. Neither path is automatically right. The key is to avoid making the decision based only on last year’s market conditions, because both rental and ownership dynamics have shifted.
A Finevo advisor can help you compare the rent-versus-buy numbers, review mortgage options across 40+ Canadian lenders, and map out a plan that fits your timing. Whether you are ready to buy now or want to prepare while renting, getting clear on your options can make the next move much less stressful.
This article is general information about Canadian mortgages and is not financial advice. Rates, programs, and eligibility are subject to change and to lender and insurer qualification. Figures cited reflect market conditions at the time of writing. Speak with a licensed Finevo advisor for guidance specific to your situation.
