The percentage of rental units in a given area that are unoccupied at a point in time. It is calculated by dividing the number of vacant units by the total number of rental units and multiplying by 100. CMHC publishes vacancy rate data for major Canadian cities, broken down by neighbourhood and unit type. A healthy rental market typically has a vacancy rate between 3% and 5%.
Why It Matters
Vacancy rate directly affects your rental income projections. The GTA has historically had very low vacancy rates -- often below 2% -- which gives landlords strong pricing power and reduces the risk of extended vacancies between tenants. When evaluating an investment property, always check the local vacancy rate and factor in at least one month of vacancy per year in your cash flow projections to be conservative.
Real-World Example
You are evaluating a rental condo purchase in downtown Toronto, where CMHC reports the condo apartment vacancy rate at 1.5%. With your unit priced to rent at $2,500 per month, a low vacancy rate means you can expect to fill the unit within two to three weeks of listing and have strong pricing power. You budget for one month of vacancy per year in your cash flow model -- a 8.3% vacancy allowance -- which is conservative given the market data but protects you against unexpected gaps between tenants.
Ontario & GTA Context
CMHC publishes annual vacancy rate data for the Toronto CMA, broken down by zone and unit type. The GTA has historically maintained vacancy rates well below the national average, often under 2% for purpose-built rental apartments. However, the condo rental market can behave differently from purpose-built rentals, and micro-market vacancy rates vary by neighbourhood and building type. Areas with heavy new condo supply, like CityPlace and Liberty Village, may experience temporarily higher vacancies when many units hit the market simultaneously.
How It Works in Practice
Check both CMHC vacancy data and local rental listing volumes before purchasing. A sudden spike in rental listings in your target building or area can indicate rising vacancy risk. Factor at least one month of vacancy per year into your cash flow projections, and consider two months if you are purchasing in an area with heavy new supply.
Common Questions
What is the current vacancy rate in the GTA?▾
How much vacancy should I budget for in my cash flow model?▾
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