Victoria saw its highest vacancy rate since 1999 in 2025, which the Canada Mortgage and Housing Corporation partially attributes to a weak labour market for younger people.
The vacancy rate in Victoria grew to 3.3 per cent, according to the 2025 Rental Market Report by the CMHC. At the same time, the average rent for a two-bedroom unit increased by 5.1 per cent to $2,120.
The region has seen a reduction in international migrants and students, which has softened demand.
“A weak labour market for younger people reduced rental demand,” CMHC says in its report.
“Slower hiring and rising unemployment, especially among younger workers, limited new household formation. While overall employment appeared stable over the past year, underlying weakness was concentrated in export-focused regions impacted by trade uncertainty.”
Statistics Canada’s November 2025 labour force survey showed that youth in the country saw employment growth for the first time this year last month, seeing 1.8 per cent growth.
“Youth bore the brunt of a difficult labour market through most of 2025,” StatCan says.
The survey also notes that employment rates among “core-age” people from 25 to 54 saw little change. The average employment rate in this group from 2017 to 2019 was 82.8 per cent, with November 2025 sitting at 83.4 per cent.
The CMHC report says that vacancy rates were up significantly in the downtown core and in Saanich, “largely due to higher rental supply in these areas.”
While Greater Victoria did still see above historic levels of purpose-built rental supply being added, it was at a slower pace than in 2024. Many new units were built in Saanich, Esquimalt and Langford.
“Our market intelligence suggests that developers and operators see Victoria’s rental supply as mostly balanced but are cautious about new developments,” the CMHC report says.
“Langford is seen as highly competitive, with landlords offering incentives that could slow future growth compared to recent expansions.”
Average rent for two-bedroom units were highest in Sidney and Langford.
CMHC attributes the high rent prices in Sidney due to limited rental supply and strong demand for the amenities and lifestyle factors.
Victoria also saw its highest turnover levels since 2019, due to the rapid growth of purpose-built rental stock.
“New completions in Saanich helped ease tight market conditions in the area, leading to higher turnover rates,” the CMHC report says.
Christine Boyle, minister of housing and municipal affairs, said the increased vacancy rate in Victoria and Vancouver is a result of the work the B.C. government has done to get homes built faster.
“Vacancy rates in Metro Vancouver and Greater Victoria are the highest they’ve been in decades and rents are going down,” Boyle said in a statement on Dec. 17.
“In this past month, we have seen that B.C. continues to lead the country in asking-rent declines, down 8.5 per cent in the past two years. This means that, finally, more people are finding homes to live in for less.”
Boyle points to the work in cutting red tape to speed up approvals andn restricting short-term rentals as measures that helped ease the vacancy crunch.
“We still have more good work to do to get to a point where housing is truly affordable for everyone. Renters can’t afford to have the progress that we have achieved together undone,” Boyle said in the statement.
“We can’t go backwards to the days of red tape and policies that fuelled speculation, blocked construction and drove housing costs beyond what everyday people could afford, pushing out people who shape and support our communities – people like bus drivers, teachers, health-care workers and construction workers – who shape and support our communities. We will not let up in delivering affordable housing for renters.”
National vacancy rate rose above 10-year average
Across the country, the vacancy rate rose from 2.2 per cent in 2024 to 3.1 per cent.
“Across Canada’s largest rental markets, the imbalance that defined the past few years eased,” the CMHC report says.
“Historically strong completions of rental units and weaker demand caused by slower population and economic growth were responsible for softening rents.”
All major census metropolitan areas in the country saw vacancy rates rise for purpose-built rentals, with the largest increases being seen in areas with new rental completions or near post-secondary institutions.
The CMHC notes there are signs that affordability levels are stablizing in the most expensive markets.
“With more vacant units on the market, competition for tenants increased, which tempered rents on new leases,” the report notes.
“This gave prospective renters some relief and made less expensive units more available.”
However, this is paired with income growth slowing due to weaker labour market conditions, meaning affordability remains low.
“As incomes grow and vacancy rates stay elevated, affordability is expected to improve more broadly next year,” the report says.