Canada's Multifamily Market Masks Two Distinct Realities

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New forecast finds very different paths ahead for high-end and more affordable units

ARLINGTON, Va.--(BUSINESS WIRE)-- Canada's multifamily vacancy rate is expected to begin trending down in the second half of 2027 as improving absorption outpaces a moderating pace of new deliveries, according to a new forecast from CoStar Group, the leading global provider of online real estate marketplaces, information and analytics in the property markets.

The national multifamily vacancy rate has risen from barely 2% in 2022 to 4.75% today, as net deliveries – which have averaged a consistent 8,000 units per quarter since 2023, roughly double the pace of the five years before the pandemic – have outpaced net absorption despite strong population growth. That national figure, however, masks two very different stories. The vacancy rate for low-end (affordable) units sits at just 3% today, while the rate for higher-end units has jumped from about 7% in 2022 to roughly 15% today, since most new units delivered in recent years have skewed toward the high end.

“When people talk about a shortage of homes in Canada, they are almost always talking about a shortage of affordable homes – there is no shortage of luxury units available,” said Mario Lefebvre, Chief Economist for Canada at CoStar Group.

CoStar's new forecast calls for net absorption to begin rising at the end of 2026 – one quarter earlier than in the firm's previous forecast – a trend that may seem surprising given Canada's declining population but is attributable to pent-up demand and declining rent.

“The balance of risks in this forecast remains tilted to the downside,” Lefebvre said. “Trade and tariff uncertainty, higher fuel costs, and a declining population could further weigh on the economy and alter expected absorption results. Over the longer term, equilibrium will be restored in the multifamily sector, though the timing will be heavily influenced by future decisions on immigration targets.”

The full forecast can be found here.

About CoStar Group
CoStar Group (NASDAQ: CSGP) is a global leader in commercial real estate information, analytics, online marketplaces, and 3D digital twin technology. Founded in 1986, CoStar Group is dedicated to digitizing the world’s real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives.

CoStar Group’s major brands include CoStar, a leading global provider of commercial real estate data, analytics, and news; LoopNet, the most trafficked commercial real estate marketplace; Apartments.com, the leading platform for apartment rentals; Homes.com, the fastest-growing residential real estate marketplace; and Domain, one of Australia’s leading property marketplaces. CoStar Group’s industry-leading brands also include Matterport, a leading spatial data company whose platform turns buildings into data to make every space more valuable and accessible; STR, a global leader in hospitality data and benchmarking; Zonda, a leading provider of data, analytics, software, and marketplace solutions for the residential construction industry; Ten-X, an online platform for commercial real estate auctions and negotiated bids; and OnTheMarket, a leading residential property portal in the United Kingdom.

CoStar Group’s websites attracted over 118 million average monthly unique visitors in the second quarter of 2026, serving clients around the world. Headquartered in Arlington, Virginia, CoStar Group is committed to transforming the real estate industry through innovative technology and comprehensive market intelligence. From time to time, we plan to utilize our corporate website as a channel of distribution for material company information. For more information, visit CoStarGroup.com.

This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that economic and demographic conditions adversely affect multifamily demand, resulting in higher vacancy rates than forecast. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2025 and Forms 10-Q for the quarterly periods ended March 31, 2026, June 30, 2026, and September 30, 2025, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260831180999/en/

Media Contact:

Matthew Blocher
CoStar Group
(202) 346-6775
mblocher@costar.com

Source: CoStar Group

Key Terms

multifamily vacancy rate technical

The multifamily vacancy rate is the share of rental housing units in an apartment or multi-unit property stock that are unoccupied and available for rent, expressed as a percentage (vacant units divided by total rentable units). It matters to investors because it signals rental demand and income potential — similar to how the number of empty seats at a theater shows how well a show is selling — and influences rental revenues, cash flow stability, and property valuation.

net deliveries technical

Net deliveries is the count of goods or units a company transfers to its customers during a reporting period after subtracting returns, cancellations or other adjustments that reduce the total actually handed over. For investors, it shows the company’s true sales momentum in units — like counting how many cars actually drove off the lot after factoring in refunds — rather than just orders or production figures.

net absorption technical

Net absorption measures how much usable commercial space becomes occupied or vacant over a set period by subtracting space vacated from space newly leased; it is essentially the net change in occupied square footage. Investors care because it shows real demand for properties—rising net absorption is like water flowing into a bucket (more tenants moving in), which tends to support higher rents and property values, while falling absorption signals weakening demand.