Calgary Rental Market 2025: Stability, Supply & Investor Outlook

Calgary’s rental market delivered a rare combination in 2025: record-high new supply and steady vacancy rates. For investors, this signals a market transitioning into its next cycle—one defined by balanced conditions, a maturing purpose-built sector, and increasingly strategic tenant preferences.

Vacancy Rates Held Steady as Calgary Absorbed New Supply

Despite a surge in new completions, Calgary’s purpose-built rental vacancy rate held firm at 5% in 2025—a strong indicator of market balance.

However, absorption speed varied by submarket:

• North Hill, Southeast, Northeast, and Fish Creek reported elevated vacancies. These zones saw large-scale projects come online, and lease-up periods lengthened accordingly.

• Smaller buildings (3–24 units) posted higher vacancy rates, reinforcing tenant preference for larger buildings with stronger amenity packages.

• Buildings with 25+ units were largely stable, benefiting from professional management and amenities that align with shifting renter expectations.

Higher-End Units: Elevated but Improving Vacancy Rates

The upper quartile recorded a 6.7% vacancy rate, still high but lower than 2024.

Drivers:

• Competition with newer condo rentals.

• Premium pricing on post-2015 buildings.

• Renters trading up only when amenities justify the premium.

Higher-rent segments absorbed more slowly than lower-rent categories, signalling value sensitivity even with strong employment fundamentals.

Demand Remained Healthy—But Slowed by Migration and Youth Employment Trends

Calgary continues to benefit from:

• Strong full-time employment

• Ongoing population growth

However, two headwinds moderated rental formation:

• Slower migration relative to prior years

• Higher youth unemployment, delaying independent household creation

Net effect: demand grew, but at a slower pace, allowing the market to absorb new supply without pushing vacancy upward.

Purpose-Built Rental Supply Grew at the Fastest Pace in Decades

Purpose-built rental inventory expanded by 11% in 2025, marking one of the largest annual increases in modern Calgary history.

Most growth occurred in zones with land and development capacity:

• Southwest

• Southeast

• Northwest

High-End Supply Dominated New Completions

Developers continued prioritizing premium units—largely amenity-rich, lifestyle-oriented rentals.

Implications for investors:

• Wider rent segmentation between entry-level and premium inventory

• Competitive pressure on condo investors, particularly for newer units

• Potential softening in upper-tier rent growth as supply deepens

With more rental projects under construction, vacancy is expected to rise modestly in the near term, and rent growth to continue stabilizing.

Rent Growth Stabilized as Market Softened and Affordability Improved

Average rents in the purpose-built market remained stable in 2025.

Key dynamics:

• Newer buildings increased headline rent averages.

• Same-sample rents—existing buildings—were flat, indicating landlords avoided aggressive increases to remain competitive with new inventory coming online.

• Rent declines were observed in North Hill, Northeast, Chinook, and Fish Creek, while other zones saw slight increases driven by premium projects.

Affordability improved overall, as shown by a slight decline in Calgary’s rent-to-income ratio.

Turnover Rates Remained Stable as Incentive Use Increased

Turnover was largely unchanged across Calgary, with increases only in the Northwest and Northeast.

Landlords responded to competitive pressure by:

• Aligning older-building rents with newer offerings

• Introducing incentives to maintain occupancy

• Keeping renewals steady to reduce churn

This helped stabilize mobility across most zones.

Condominium Rentals: Rising Vacancy and Falling Investor Participation

The condo rental market faced clear competitive pressure from the growing purpose-built sector.

2025 dynamics:

• Condo vacancy rate increased to 2.2%

• Largest vacancy increases occurred in 25–49 unit and 100+ unit condo buildings

• Condo rental supply expanded by 2,647 units, with the West zone leading additions

• Share of units offered for rent fell to 35%, reflecting reduced investor activity

Renters who once preferred condos for finishes or locations now find similar amenities, professional management, and stable leases in new purpose-built developments.

Consequently, investors moderated rents and added incentives, holding 2-bedroom condo rents flat year-over-year.

Investor Takeaways: Calgary Remains a Strong Market—But Strategy Matters

1. Expect Vacancy to Drift Higher Near-Term

Record supply pipelines will add upward pressure. Balanced markets favour disciplined, value-focused investors.

2. Premium Units Face More Competition

Higher rents require standout amenities, competitive concessions, and professional-class management.

3. Purpose-Built Rentals Are Outperforming Condos

Tenants increasingly prioritize buildings with amenities, management stability, and predictable leases.

4. Rent Growth Will Be Moderate

Flat same-sample rents underscore a competitive landscape. Underwriting assumptions should remain conservative.

5. Affordability Is Improving—But Demand Softness Bears Watching

Demand fundamentals remain solid, though migration and youth employment trends must be monitored.

Final Outlook: A Balanced Market Entering a Transitional Phase

Calgary’s rental market absorbed a remarkable wave of new supply in 2025 without destabilizing vacancies.

The market is shifting toward:

• More professionalized purpose-built inventory

• Moderating rent growth

• Higher vacancy among premium and condo rentals

• Improved affordability for renters

For investors, the opportunity lies in buying well-positioned assets, pricing intelligently, and operating with precision as Calgary continues its long-term trajectory of growth and maturation.

Source: CMHC Website