Toronto rental vacancy is going up. There is a lot more new supply, and asking rents are down from a year ago. If you invest in Toronto real estate, or you are thinking about buying a Toronto multiplex, you are right to take that seriously.
But for most multiplex investors in Toronto, the biggest risk is not an empty unit. It is a lower rent. We went through CMHC’s latest Housing Market Outlook line by line. Here is what vacancy and rents are expected to do in Toronto through 2028, and what a softer rental market really costs a multiplex investor.
What Toronto’s Rental Vacancy Rate Really Measures
Toronto’s rental vacancy rate was 3% in 2025. CMHC expects it to reach 3.8% in 2026. That is real, but the number does not measure what most people think.
It is a snapshot of private rental buildings with 3 or more units, taken every October. It lumps every unit together, in every part of Toronto. A tiny 1 bedroom in a new purpose-built rental tower counts the same as a 3 bedroom in an older multiplex. Condos rented out by their owners are not even in this number. CMHC tracks those separately, but they still compete for the same tenants.
The jump also sounds bigger than it is. Going from 3% to 3.8% is about a 27% increase on paper. But it is less than 1 percentage point. Spread across a whole year, that is about 3 extra days of vacancy per unit. All in, 3.8% works out to about 2 weeks a year.
Why Toronto Vacancy Is Rising: Fewer New Renters, More New Condos
CMHC points to 2 things, and it is the usual story: supply and demand. Demand slowed because population growth in Toronto has slowed way down. Statistics Canada shows the Toronto area grew by a record 269,000 people in the year to July 2024. In the year to July 2025, it was almost flat. Fewer new people means fewer people looking for a place to rent.
Supply is up because a wave of new condos has finished, and many are owned by investors who rent them out. CMHC calls this the secondary rental market. Urbanation reports a record of about 29,800 condo completions in the Greater Toronto and Hamilton Area in 2024, and about 29,300 in 2025.
Here is the part most people miss. Most of those new condos are small 1 bedrooms, and that is where the extra supply is landing. A 2 or 3 bedroom unit in a Toronto multiplex is a different market. It is close to schools, in a real neighbourhood, and often has a yard. It also costs less than renting a whole house. There are not many of these units, so family-sized rentals face less new competition and steadier demand. In our own Toronto multiplexes and our clients’, when a tenant gives 2 months’ notice, we usually have the next tenant lined up before the old one leaves.
CMHC’s Toronto Rental Forecast to 2028
CMHC’s baseline has Toronto vacancy holding at 3.8% in 2027, then dropping to 2.9% in 2028. Toronto is the only big Ontario city in the report where vacancy comes back under 3%. Most of the others keep climbing.
| City | 2024 | 2026 (F) | 2028 (F) |
|---|---|---|---|
| Toronto | 2.5% | 3.8% | 2.9% |
| Oshawa | 3.6% | 4.6% | 3.7% |
| Ottawa | 2.6% | 3.6% | 3.8% |
| Hamilton | 2.4% | 4.0% | 4.3% |
| St. Catharines-Niagara | 3.8% | 4.4% | 4.4% |
| Windsor | 3.3% | 4.1% | 4.5% |
| London | 2.9% | 4.3% | 4.7% |
| Kitchener-Waterloo | 3.6% | 4.5% | 4.7% |
CMHC also expects Toronto’s average 2 bedroom rent to rise about 8% from 2026 to 2028, the fastest in Ontario. The reason Toronto turns around is construction. A lot of new supply is hitting the market now, but those buildings were started years ago. Toronto housing starts fell from about 47,000 in 2023 to about 26,000 in 2025, almost half. Homes that were not started will not show up in 2028.
The best case against us comes from CMHC itself. It says rents are still high compared to incomes, so Toronto rents will find it hard to jump quickly. But if borrowing costs stay high, more people keep renting instead of buying, and over time that can push rents up too.
Vacancy vs Lower Rent: What Really Costs Toronto Multiplex Investors
Let’s put real numbers on it. Say you own a Toronto triplex that brings in $6,000 a month in total rent. This is an example, not a forecast. If your units sat empty 3.8% of the year, that would cost you about $2,700 a year. And that is a one-time hit, only when a unit turns over.
Now say rents in your area drop 10% when your units turn over. That is $7,200 a year in lost rent. The lower rent sticks for the whole lease, and often longer. So a rent cut costs more than 2.5 times what vacancy does, and it keeps costing you every year it lasts.
Here is the good news on rents. We track Toronto asking rents on Zumper, and our own, by bedroom type. Since the start of 2026, they have been levelling off month to month. Year over year they still look like they are falling, and those are the numbers you see in the news. But that drop has mostly already happened, and rents have been pretty stable this year.
What Toronto Multiplex Investors Should Do Now
If you are buying a Toronto multiplex in the next 6 months, be conservative on rents, rates and price. This matters even more if you are renovating before you lease, since you might not be renting until 6 months to a year from now. Check what similar units in that exact neighbourhood rent for today. We often see a pro forma from last year with great rent numbers, but at today’s rents and rates the cash flow drops a few hundred dollars a month. Stress test it. For example, a $1.1M triplex renting for $6,000 a month cash flows about $950 a month at a 3.5% rate. At 4.5% with rents $300 lower, that falls to about $150. At $1M, it is back to about $585. If the deal does not work at the stress test, the price needs to come down, and with fewer buyers out there, you have more room to negotiate than you did a few years ago.
If you already own and a tenant gives notice, price the new lease at today’s market, not what the last tenant paid. Asking $150 too much and waiting a month costs you more than pricing it right. If you are converting a Toronto house into a multiplex, think hard about unit mix. More small units can look better on paper, but they compete head to head with all the new condos. Fewer, bigger units can mean steadier tenants and less turnover, so run both before you pick.
If you are sitting on the fence, use the slower market. CMHC expects Ontario sales to stay historically weak, so you can usually take the time to do your homework before you firm up. A few years ago in Toronto, buyers did not get that luxury. And honestly, some of you should wait. If you do not have a few months of mortgage payments set aside, build that first.
Plan for Rents, Not Headlines
Rising vacancy is not the same as your units sitting empty. The number that matters more is the rent on your next lease. If your deal works with conservative rents and rates, you can carry it and ride through the short-term ups and downs in the Toronto rental market.
That is why local rent data matters so much right now. Our leasing team works in Toronto multiplex neighbourhoods every day, and we are landlords too, so we can help you check what a unit will really rent for before you buy or re-lease.
Our brokerage specializes in Toronto multiplexes. We’ll help you find deals, crunch the numbers, and guide you through renovations and management. If you want full support in Toronto multiplex investing, our team can help you:- Find high-potential properties
- Crunch the numbers so you know exactly where you stand
- Coach you through renovations to maximize returns
- Lock in great tenants
- Provide full property management so your investment runs smoothly
What Toronto Real Estate Investment Is Right For You?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!
This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
