What is it?
The vacancy rate is the share of all units or space that is empty. When more units are empty the vacancy rate rises, and rental income falls by that much.
CMHC’s (Canada Mortgage and Housing Corporation) Rental Market Survey counts a unit as vacant if, at the time of the survey, it is physically unoccupied and available for immediate rental. That means no new lease has been signed and the unit is not undergoing major renovations.
How is it used in valuation?
- Subtract the money not received because of vacancy (vacancy loss) from the rental income to find net operating income (NOI).
- When vacancy in the nearby area is high, finding tenants takes longer and perks may grow.
- Vacancy shows the mood of the area and the building type, not only one building. Check the latest market reports.
What to watch out for
Reports differ in how they calculate vacancy (by area or by number of units, and whether space about to be empty is counted). Do not compare numbers directly. Look at changes over time inside one report. The CMHC survey covers residential rentals and differs from commercial vacancy.
What the law and official sources say
Quotes are copied word for word. The "In plain words" lines are our explanation, not an official translation.
Vacancy: A unit is considered vacant if, at the time of the survey, the unit is physically unoccupied and available for immediate rental Available for immediate rental means a new lease has not been signed or the unit is not undergoing major renovations.In plain wordsCMHC counts a unit as vacant if it is physically empty and available for immediate rental at the time of the survey, meaning no new lease has been signed and it is not undergoing major renovations. This definition belongs to the residential rental survey.
Source: cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/surveys/methods/methodology-rental-market-survey · checked Nov 2, 2026
Common questions
Is a low vacancy rate always good?
It usually means stable income, but it can also mean the rent is set well below the market so the units never empty. Look at the vacancy rate and the rent level together.
What vacancy rate should I put in a building calculation?
It depends on the building and the local market. Use the real vacancy of recent years and nearby market reports, realistically, not the seller’s number as it is. The calculator on this site does not provide market numbers, so you enter your own.
Guides that use this term
Sources checked
- CMHC, Rental Market Survey methodology · checked Nov 2, 2026