Quebec can expect more rental housing supply, higher vacancy rates in 2026: CMHC

The Canada Mortgage and Housing Corporation (CMHC) is painting a cautiously optimistic portrait of Quebec’s housing market this upcoming year.

According to its 2026 housing forecast, Montrealers especially can expect an increase in vacancy rates, more supply from completed housing starts and a slowdown linked to population growth.

However, affordability may once again be a key issue.

“We expect price growth to continue in 2026 but maybe at a slower pace than in 2025 because the demand will be stable or only with a small growth,” CMHC economist Francis Cortellino told CTV News.

According to the CMHC, Canada’s economy is projected to grow slowly this year and will face uncertainty amid trade talks with the United States and Canada-United States-Mexico Agreement negotiations.

The country is also facing high unemployment, modest income growth and low population growth. In Quebec, this is especially marked by the federal government’s cap on international students and the province’s reduced immigration targets.

After strong growth in 2025, except for condominiums, the CMHC predicts Quebec’s rental housing starts will “remain high in 2026 but start slowing gradually over the medium term.”

The CMHC expects a shift in supply and demand in the province’s main rental markets, especially as international students and newcomers tend to rent.

The CMHC predicts that purchasing demand will stay low across the country this year due to an imbalance in price-to-income ratios, high carrying costs and job uncertainty that “will keep many buyers on the sidelines.”

“From an overall national perspective, rental markets will be more balanced as new rental supply arrives and outgrows rental demand,” the CMHC said in its report. “Higher vacancy rates and slower rent increases are expected nationwide, giving renters more time and flexibility to save before buying a home.”

In 2025, Quebec rents increased at a higher rate than ever before, with record-setting hikes.

The CMHC says that with the province having revised its rent increase calculation system, “the recommended rent increase will probably be lower starting in 2026.”

• READ MORE: Quebec rental board approves 3.1% base rent hike

The report also noted a marked increase in the supply of new units, especially apartments, in the province last year. These units “tend to push average prices up,” and the CMHC said “rental property developers and owners will try to keep prices competitive.”

According to the CMHC, the last few years “have been marked by record levels of rental housing starts in Quebec’s main markets” thanks to government programs and incentives which stimulated construction.

It added that “strong demand has created favourable conditions,” saying vacancy rates could hit as much as 4.5 per cent in some markets this year.

Rental housing makes up 80 per cent of new residential housing units and is planned years in advance, CMHC said. Condo development, on the other hand, has been “weak,” according to the report.

• READ MORE: 1 in 5 Quebecers had trouble paying rent last year

With population growth slowing since 2024, impacting demand, the CMHC expects market pressure to ease in 2026 and even more in 2027.

“Montreal may even see a population decrease,” said the CMHC. “Among Quebec’s metropolitan areas, Montreal has been the most affected by the net loss of non-permanent residents. As a result, its housing market — especially the rental market — is likely to soften.”

Quebec City is an exception, according to the CMHC, where all markets are expected to remain tight as the economy depends heavily on the service sector, and demand is strong.

More supply, not necessarily more affordable

For Quebec homeowners looking to sell, it may be harder to find a buyer this year, with listings outgrowing sales and economic uncertainty keeping some off the market.

“Younger households are especially hard-hit,” the CMHC said, “and moving to homeownership remains difficult for them. They’re also more vulnerable to weakness in the job market than other households.”

The CMHC’s Cortellino said the resale market is expecting smaller price growth this year.

While the CHMC report notes that Quebec’s economy is more resilient than some other provinces and the impact of American tariffs is limited, affordability is not guaranteed.

Cortellino agreed housing affordability will “remain a challenge or an issue” in 2026.

Previous CMHC reports have shown that higher vacancy rates paired with higher rents lead to new, expensive units staying empty.

In a report published last December, the CMHC warned that affordable apartments are disappearing in Montreal despite market indicators easing.

Still, according to Cortellino, most new units are occupied and without them “the rent growth would be even higher in those past few years than what we had in 2025.”

He added that “eventually, you would like that gap [between income and rent] to be smaller, but for now, at least you want it to be stable.”

Still, according to Cortellino, most new units are occupied and without them “the rent growth would be even higher in those past few years than what we had in 2025.”

He added that rent will continue to increase, but at a slower pace, and “eventually, you would like that gap [between income and rent] to be smaller, but for now, at least you want it to be stable.”