Quick answer. Calgary rents are declining in 2026 because of three converging forces: a historic surge in new rental supply (nearly 7,000 purpose-built rental units delivered in 2024 alone, 165 percent above the historical average per CMHC), moderating population growth as international migration slows through 2027, and a normalization of demand after two years of double-digit rent increases (14.3 percent in 2023, 8.9 percent in 2024). The result: CMHC purpose-built vacancy reached 5.0 percent in October 2025, up from 1.4 percent in 2023. Calgary's first rent declines since the pandemic landed in early 2025 with 2-bedroom advertised rents falling 7.2 percent year-over-year in January 2025. Market balance is projected to return by 2027 as new supply absorption catches up and population growth potentially stabilizes.
The Three Forces Driving the Decline
Force 1: Record new supply
Calgary delivered nearly 7,000 purpose-built rental units in 2024 alone, which CMHC has confirmed is 165 percent above the historical average. Purpose-built rental supply expanded by 11 percent through 2025. The deliveries trace back to 2022 and 2023 development decisions made when vacancy was at multi-decade lows and rents were rising at double-digit rates. Construction takes 18 to 30 months on apartment buildings, so the supply hitting the market in 2024 and 2025 was committed before the demand picture softened.
The geographic concentration of the new supply matters. Heavy deliveries in downtown core, the Beltline, NE Calgary, and the University District / Brentwood corridor have produced the most aggressive rent declines in those submarkets. Established inner-city walkable neighbourhoods without significant new supply (Marda Loop, Mission, Bridgeland, Hillhurst, Kensington) have held rents much firmer.
Force 2: Moderating population growth
Calgary reached approximately 1.56 million residents in 2025 with growth of 2.9 percent, tied for the highest rate among major Canadian cities. The growth has been driven by interprovincial migration from Ontario and BC plus international immigration. Federal immigration policy changes through 2024 and 2025 have moderated international student and temporary worker volumes, with effects continuing through 2027. The Prairies are entering a period of slower economic growth as labour force and population gains from 2022-2024 begin to ease. Population growth at 2 to 2.5 percent annually (versus 3 to 4 percent in the peak migration years) produces materially less new rental demand.
Force 3: Demand normalization after the boom
Calgary rents rose 14.3 percent in 2023 and 8.9 percent in 2024. Tenants who would have moved to new units, traded up to better units, or accepted aggressive rent increases through that period reached affordability limits. The 2025-2026 softening represents demand catching its breath after two years of double-digit gains rather than a fundamental erosion of Calgary's demographic strength.
The Numbers in Detail
- CMHC Calgary purpose-built vacancy: 1.4 percent (October 2023), 4.6 percent (October 2024), 5.0 percent (October 2025).
- Q1 2025 advertised rent declines: 2-bedroom down 7.2 percent year-over-year (January 2025); CMHC reported declines of 2 to 8 percent across unit types in Q1 2025.
- 2026 trajectory: continued softening early in the year with apartment-style condos hit hardest; townhouses and single-family rentals more stable.
- Concession environment: first-month-free, free parking, included utilities all common in saturated submarkets in 2026.
- Days-on-market: lengthened from typical 7 to 14 days in 2023 to 21 to 35 days in saturated 2026 submarkets.
Which Submarkets Are Softening Most
- Downtown Beltline studio and 1-bedroom new builds: deepest concessions, highest vacancy among Calgary submarkets.
- University District and Brentwood new purpose-built rentals: heavy supply targeting students and young professionals.
- Saddle Ridge, Saviour Hills, parts of NE apartment buildings: newer supply ahead of demand growth.
- Larger downtown 2-bedroom and condo units: meaningful softening but less severe than studios.
- Premium-finished new build apartment buildings in any quadrant: discounts and concessions reflecting the supply wave.
Which Submarkets Are Holding Up
- Inner-city walkable SW (Marda Loop, Mission, Lakeview, Altadore): tightest vacancy and most stable rents.
- SE master-planned family communities (Mahogany, Auburn Bay, Cranston): strong family demand and long tenant tenure.
- Established character buildings in inner-city NW (Bridgeland, Hillhurst, Kensington): premium tenant demand on character properties.
- Townhouses in northern growth communities (Evanston, Nolan Hill): limited new rental supply, family-oriented demand.
- Surrounding cities (Chestermere, Cochrane): tight vacancy below the citywide average, limited new supply.
When the Bottom Hits
Market analysts and CMHC commentary suggest Calgary rents are likely to find a floor in mid-to-late 2026 and begin a gradual recovery into 2027. The factors supporting that timeline:
- New supply delivery slows after the 2024 peak. Permit data suggests 2026 and 2027 starts will be below 2022-2023 levels in many submarkets.
- Population growth normalizes around 2 to 2.5 percent annually rather than rapidly decelerating further.
- Tenant affordability re-anchors around new rent levels, with demand strengthening as the gap between rent and household income normalizes.
- Interprovincial migration from Ontario and BC continues, sustaining baseline demand.
- Calgary's economic fundamentals (energy sector capital spending, tech sector growth, no provincial PST and lower taxes) remain attractive.
Reasonable base case: vacancy peaks in late 2026 at approximately 5.5 to 6.0 percent, then declines through 2027 toward 4.5 to 5.0 percent. Rents flatten in late 2026 and begin gradual nominal growth of 1 to 2 percent in 2027, accelerating thereafter as the supply pipeline tightens.
What Landlords Should Do in 2026
- Price aggressively at market. Overpricing in 2026 produces extended vacancy that exceeds the cost of pricing at market.
- Lock in 13 to 14 month leases where possible to push renewals into the stronger May to August leasing window.
- Hold or modestly raise rent on strong tenants. Tenant retention beats aggressive rent increases in a soft market.
- Invest in property quality. Concession-free units in well-maintained buildings still lease faster than discounted units in tired buildings.
- Use first-month-free concessions strategically in saturated submarkets to preserve face rent for future re-pricing.
- Reserve heavily for the next cycle. The market will recover, but the timing is uncertain.
How Calgary 2026 Compares to Other Canadian Markets
Calgary's rent decline is part of a broader Canadian rental market softening, but the specific drivers and trajectories differ across cities:
- Toronto: rent declines driven by supply absorption and slowing immigration. Cooling pattern similar to Calgary but at meaningfully higher absolute rent levels.
- Vancouver: most pronounced rent decline in the major Canadian markets in 2025-2026. Vancouver's tight pipeline may produce the fastest recovery (CMHC projecting 4 to 7 percent annual rent appreciation potential as supply tightens).
- Montreal: more modest softening; Quebec's rent control framework limits both the boom and the bust.
- Edmonton: softer pattern similar to Calgary; Alberta's broader supply story affects both major cities.
- Ottawa: stable to modestly declining, anchored by government employment.
Calgary's recovery trajectory may be faster than Toronto's because the underlying population growth fundamentals are stronger and the no-rent-control framework permits faster rent re-pricing when demand returns. Calgary's recovery may be slower than Vancouver's because Calgary's new supply pipeline is larger relative to demand growth.
What Investors Should Do in 2026
- Underwrite at 2026 rents, not 2023 peaks. Pro forma should reflect the actual market today, not the boom-year highs.
- Acquire selectively in undersupplied submarkets. The inner-city walkable areas and family-oriented suburbs hold up best.
- Avoid the most-saturated downtown new-build segments unless prices fully reflect the supply picture.
- MLI Select projects remain attractive because the affordability ceiling is close to market rent in Calgary; the financing benefit compounds over the long hold.
- Hold cash reserves. The cycle may extend longer than the base case; reserves protect against forced sales at the bottom.
Frequently Asked Questions
Why are Calgary rents going down in 2026?
Three forces: record new rental supply (7,000 purpose-built units in 2024 alone, 165 percent above historical average), moderating population growth as international migration slows through 2027, and demand normalization after two years of double-digit rent increases (14.3 percent in 2023, 8.9 percent in 2024).
When will Calgary rents start increasing again?
Most analysts expect Calgary rents to find a floor in mid-to-late 2026 and begin gradual recovery into 2027, with nominal annual rent growth of 1 to 2 percent in 2027 accelerating thereafter as new supply moderates and population growth re-anchors.
Is Calgary in a rental market crash?
Not a crash, but a meaningful re-set after two years of unusual rent growth. The 2025-2026 declines (advertised rents down 2 to 8 percent in Q1 2025) are softening rather than collapse. The underlying demographic fundamentals supporting Calgary remain intact.
Which Calgary neighbourhoods are hit hardest by the rent decline?
Downtown Beltline new-build studios and 1-bedrooms, University District and Brentwood new-build apartments, and parts of NE Calgary with heavy new supply. Inner-city walkable SW neighbourhoods and SE family-oriented master-planned communities have held up best.
How much have Calgary rents fallen?
Q1 2025 advertised rents fell 2 to 8 percent across unit types per CMHC, with 2-bedroom advertised rents down 7.2 percent year-over-year in January 2025. 2026 has seen continued softening though at moderating rates.
Should I sell my Calgary rental in 2026?
Most existing landlords are better off holding. Selling into the soft rent market also means selling into a slightly softer sale price. Holding through 2027 typically captures both rent recovery and price recovery. Sell if you are over-leveraged, have a better-yielding alternative, or your property is in a saturated submarket without a credible recovery story.
Is the Calgary rent decline going to last?
Cyclical declines in Calgary have historically been short and sharp. The 2025-2026 softening is consistent with that pattern. New supply will moderate, population growth will stabilize, and demand will catch up to the supply wave. The base case suggests recovery beginning mid-to-late 2026.
Will Calgary introduce rent control because of the price spikes?
There is no announced legislative agenda to introduce rent control in Alberta as of 2026. The provincial affordability strategy focuses on supply (blanket rezoning, secondary suite amnesty, alignment with CMHC MLI Select) rather than rent caps.
How does the 2026 Calgary rent decline compare to past downturns?
Calgary has experienced rental softening before, notably during energy-sector downturns in the 1980s and 2014-2016. The 2025-2026 decline is more supply-driven than demand-driven, with population growth still positive at approximately 2.9 percent in 2025. The combination of strong supply absorption capacity (population continuing to grow) and limited new supply pipeline beyond 2026 suggests a relatively short cycle compared to past Calgary downturns.
What is the leading indicator that Calgary rents are turning around?
Days-on-market is the earliest indicator. When listings start moving faster (under 14 days for typical inner-city units), the inflection point is near. CMHC's quarterly absorption rate data is the second indicator; when absorption catches up to new supply, vacancy starts compressing and rent pressure builds. Watch both metrics through 2026 and into 2027.
Should I refinance my Calgary rental while rents are down in 2026?
Depends on the specific situation. Refinancing during a soft rent cycle can produce lower appraised values and tighter debt-service coverage on the new mortgage. Owners with strong cash flow buffers and immediate use for refinance proceeds may proceed; owners refinancing speculatively should wait for the market to recover. Discuss specific timing with a mortgage broker.
Will Calgary rents return to 2023 peak levels?
Eventually yes, but the timing is uncertain. The 2023 peaks were the product of unusual demand conditions (extreme interprovincial migration plus tight supply). Returning to those levels requires either similar demand spikes or several years of recovery growth at 4 to 6 percent annual rent appreciation. The 2031 or 2032 timeframe is a reasonable base case for matching 2023 peaks in nominal terms; real (inflation-adjusted) recovery may take longer.
Bottom Line
Calgary's 2026 rent decline is a cyclical re-set driven by record new supply, moderating population growth, and demand normalization after two years of unusual rent gains. The fundamentals supporting Calgary as a long-term rental market remain intact: no rent control, no provincial land transfer tax, strong interprovincial migration, and one of the most efficient cash-on-cash math in major Canadian markets. The decline will pass; the structural advantages will not. Landlords should price at market, invest in property quality, and reserve for the next cycle. Investors should underwrite at 2026 rents, acquire selectively in undersupplied submarkets, and hold for the recovery. UrbanLease publishes Calgary rental market data and free rent estimates monthly; the rental market page tracks the data in real time.