Calgary Rental Market Update: Trends, Prices & Outlook May 2025
The Calgary rental market has experienced a dramatic transformation between 2023 and 2025. Once defined by extreme tightness and record-low vacancy rates, the market is now seeing a notable correction. Vacancy rates are up, rental prices are stabilizing, and supply is expanding faster than predicted. In this Calgary rental market update, we explore key trends, the reasons behind them, and what landlords and tenants can expect moving forward.
Calgary Rental Vacancy Rates (2023-2025): From Scarcity to Stability
In 2023, Calgary faced an acute rental shortage with a vacancy rate of just 1.4%, according to CMHC. This aligned with the national trend, which saw Canada’s vacancy rate drop to 1.5% from 3.1% in 2020. By contrast, Calgary’s vacancy rate surged to 4.8% by October 2025, marking one of the most dramatic corrections in recent history.
CMHC had forecasted a continued tightening to 1.0% by 2025, but increased supply and moderating demand shifted the trajectory. In comparison, Canada’s average vacancy rate only rose to 2.2% in 2024, showing Calgary’s local dynamics played a much stronger role.
Economic Drivers Behind Calgary’s Rental Market Shift
Several economic and policy factors contributed to the rising vacancy rates in Calgary:
1. Surge in Purpose-Built Rental Construction
Developers responded to 2023’s tight conditions with a significant increase in rental housing construction. For the first time in years, purpose-built rental starts outpaced condominium development in Calgary.
2. Changing Affordability and Buyer Behavior
High mortgage rates kept many potential buyers in the rental market through 2023. However, as buyers adjusted and Calgary remained relatively affordable, some transitioned to homeownership by late 2024.
3. Municipal Policy Interventions
Programs like the Downtown Development Incentive Program encouraged adaptive reuse of vacant office spaces, adding substantial new rental inventory downtown.
Rental Supply Growth: Strategic Expansion in Calgary
Downtown Conversion Success
Calgary’s Downtown Development Incentive Program relaunched in 2024 and has been a key driver of rental supply. The initiative offers developers up to $75 per square foot to convert vacant offices into residential units. To date, it has approved 11 projects, creating over 1,500 rental units.
The first completed project, The Cornerstone, delivered 112 units in April 2024. The federal Housing Accelerator Fundalso contributed $52.5 million, boosting Calgary’s capacity to tackle both housing shortages and downtown vacancy.
Purpose-Built Rental Growth
As CMHC noted, Calgary developers have shown increased confidence in long-term rental housing. This has created a more balanced supply pipeline, addressing demand sustainably. Unlike Toronto, where condos were repurposed as rentals, Calgary’s strategy has been purpose-driven from the outset.
Calgary Rent Prices: Moderation After Rapid Growth
After back-to-back rent increases of 12.1% in 2022 and 8.6% in 2023, Calgary rent prices are now trending downward:
- Two-bedroom rents: Down 7.2% year-over-year (January 2025)
- One-bedroom rents: Down 6%
This marks Calgary’s first rental price decline since the COVID-19 pandemic. While affordability is improving, prices are still high compared to pre-2022 levels, leading to “sticker shock” for some renters re-entering the market.
Landlord-Tenant Dynamics: Incentives and Shifting Power
With more options available, renters are in a stronger position. Landlords and property managers are responding with incentives such as:
- Free rent (e.g., first month free)
- Included utilities (internet, heat, gym access)
- Flexible lease terms
As noted by Giacomo Ladas of Rentals.ca, “It’s favourable for renters because there’s more options, but landlords now have to prioritize retention.”
While renters may now find more options and incentives in the market, it’s important to weigh the true cost of moving before making a change. Expenses such as security deposits, utility reconnection fees, and moving costs can add up quickly. Additionally, moving often involves time off work, logistical planning, and the emotional effort of adjusting to a new space. In many cases, renewing a lease in a well-managed property with responsive service may be a more cost-effective and stable choice—especially if the landlord is willing to offer renewal incentives.
Calgary Rental Policy & Regulation: 2025 Updates
Downtown Development Incentives
This policy has catalyzed the conversion of downtown commercial space to residential, directly addressing both housing needs and urban revitalization.
Proposed Rent Control Debate
In 2024, the Alberta NDP introduced Bill 205, proposing rent caps and vacancy controls. While it didn’t pass, it reflects rising interest in provincial regulation.
Short-Term Rental Restrictions
As of April 1, 2025, Calgary has implemented:
- New short-term rental limits (redefined from 30 to 180 days)
- Differentiated rules for primary vs. non-primary residences
- Prohibition of short-term rentals in designated affordable housing units
Where Are the New Rentals? Geographic Insights
Most new rental developments are concentrated downtown, with projects like The Cornerstone helping to repopulate Calgary’s core. This supports goals around:
- Increasing urban density
- Enhancing local business activity
- Reducing commute times
Suburban areas have seen less focused development, suggesting downtown will remain the epicenter of new rental housing in the short term.
2025-2026 Forecast: More Supply, More Stability
Looking ahead, experts forecast continued price moderation and strong rental supply growth. Key projections:
- Further rent decreases expected through 2025 (6–8%)
- Vacancy rates to remain higher than historic lows but below national highs
- More construction, especially purpose-built rentals, through municipal and federal incentives
CMHC anticipates that population growth will continue to drive demand, but supply is now better equipped to keep pace.
What This Means for Tenants & Landlords
Calgary’s rental market has entered a new era. For tenants, this means more options, better prices, and lease incentives. For landlords, it means adapting to a more competitive landscape by focusing on tenant retention and offering value.
The shift from a hyper-tight market to one of balance highlights how effective policy, proactive development, and flexible strategy can create a healthier housing environment.
📣 Thinking of Renting or Managing a Property in Calgary? Whether you’re a landlord seeking support or a tenant looking for a great place to live, Emerald Management & Realty Ltd. is here to help. Contact us today or browse our current listings to see what’s available!
