City benchmark · July 2026 · free calculator
Vancouver multi-family cap rate · Class A
3.50–4.00%
Class B / value-add: 3.50–4.00%
source: CBRE Q1 2026
What a 3.50–4.00% cap rate means for your financing
Put this cap rate next to your mortgage rate — that single comparison is the most useful thing on this page. If the cap rate is below your mortgage rate, you have negative leverage: the property earns less unlevered than the debt costs, so every borrowed dollar drags your return down and the property most likely runs cash-flow negative from day one. If it is above, borrowing amplifies your return instead.
Across much of Canada, negative leverage is simply the market condition — the national high-rise Class A multifamily cap rate was 4.51% in Q1 2026, among the lowest in North America. Investors accept the monthly deficit because they are buying appreciation and mortgage paydown rather than income. That is a legitimate thesis. It is only dangerous when it is unexamined.
Two Canadian specifics worth remembering: investment (non-owner-occupied) property requires a minimum 20% down payment with no CMHC insurance available, and the federal stress test still applies. If you are looking at 5+ units, the CMHC MLI Select program changes the maths considerably. Check your financed position with cash-on-cash return and whether a lender will fund it with DSCR.
Vancouver vs other Canadian markets
| Market | Cap rate |
|---|---|
| Vancouver (this page) | 3.50–4.00% |
| Toronto | 3.85–4.75% |
| London | 4.00–4.75% |
| Montreal | 4.25–4.50% |
| Quebec City | 4.25–5.00% |
| Kitchener-Waterloo | 4.50–4.75% |
| Ottawa | 4.50–5.00% |
| Calgary | 4.50–5.00% |
| Edmonton | 4.50–5.00% |
| Halifax | 4.50–5.25% |
| Winnipeg | 4.50–5.00% |
| Victoria | 4.50–5.00% |
| Saskatoon | 5.25–5.75% |
| Canada national — high rise Class A | 4.51% |
Source: CBRE Q1 2026 — CBRE multifamily, Class A, Q1 2026. Class B trades higher in most markets. CBRE reports multifamily yields rose across every segment in Q1 2026. Benchmarks are directional and move quarterly. See all markets in the cap rate by city guide.
Vancouver's private-apartment vacancy rate nearly doubled to 3.7% (from 1.6% a year earlier) while average rent rose to C$1,963, per CMHC's October 2025 Rental Market Survey. BC's property transfer tax and its first-time-buyer and newly-built exemptions have specific dollar thresholds that most Vancouver purchase prices sail straight past.
Vancouver's rental market: a 30-year vacancy high
The CMHC October 2025 Rental Market Survey puts the Vancouver CMA's purpose-built private-apartment vacancy rate at 3.7% as of October 2025, up from 1.6% a year earlier — a level CMHC's own commentary describes as the highest in more than 30 years. Average rent across all bedroom types rose from C$1,924 to C$1,963 over the same period, meaning rents kept climbing even as vacancy loosened.
For a 2-bedroom apartment specifically, Statistics Canada's experimental rent table recorded an average asking rent of C$3,030 against an average paid rent of C$2,470 in the Vancouver CMA as of April 2026 — a C$560 gap, the widest of any city in this series. That gap is the clearest sign of how much value a sitting long-term tenant is capturing versus what a unit re-lists for.
BC's 2026 rent increase limit is 2.3% for existing tenancies — meaning a Vancouver buyer who inherits a tenant paying near the StatCan average of C$2,470 cannot close that C$560 gap to market in a single year; it takes several years of guideline increases, or a vacancy, to get there.
BC property transfer tax: why Vancouver rarely qualifies for the exemptions
| Bracket | Rate |
|---|---|
| Up to C$200,000 | 1% |
| C$200,000 – C$2,000,000 | 2% |
| Above C$2,000,000 | 3% |
| Residential value above C$3,000,000 (additional) | +2% (5% total on that portion) |
gov.bc.ca, Property Transfer Tax, page dated December 3, 2025.
BC offers two exemptions that matter to a first-time buyer but rarely to a Vancouver investor: the first-time home buyers' exemption (full C$8,000 exemption up to a fair market value of C$835,000, phasing out completely by C$860,000) and the newly built home exemption (full exemption up to C$1,100,000, phasing out by C$1,150,000). Both require the buyer to be a qualifying individual — not a corporation — and neither is available to someone who has already owned property.
BC's principal-residence rule rules out short-term rental income
British Columbia's Short-Term Rental Accommodations Act principal-residence requirement limits short-term hosting to the place where someone actually lives day-to-day, plus one secondary suite or accessory dwelling unit on the same property — and Vancouver is explicitly named among the communities where this applies. A dedicated investment condo the owner doesn't live in cannot legally be operated as a short-term rental in Vancouver at all. The NOI in the worked example above — and in the calculator on this page — should be built on long-term rent (the CMHC and StatCan figures cited), not a nightly-rate projection.
Methodology
Vacancy and average-rent figures are CMHC's October 2025 Rental Market Survey (purpose-built private apartments, Vancouver CMA total, all bedroom types). Asking-versus-paid rent is Statistics Canada's experimental table 46-10-0092-01 for 2-bedroom apartments, April 2026. Property transfer tax figures are the general PTT schedule and the two named exemptions as published by the Government of BC; the worked example uses a C$900,000 purchase price chosen only to sit above both exemption ceilings, not as a claimed average sale price.
Sources
- CMHC — Rental Market Survey Data Tables, Vancouver 2025 — accessed 2026-09-21
- Statistics Canada — Table 46-10-0092-01, asking and paid rent — accessed 2026-09-21
- Government of BC — Rent increases (Residential Tenancy Branch) — accessed 2026-09-21
- Government of BC — Property Transfer Tax — accessed 2026-09-21
- Government of BC — First time home buyers' program — accessed 2026-09-21
- Government of BC — Newly built home exemption — accessed 2026-09-21
- Government of BC — Principal residence requirement (STR Act) — accessed 2026-09-21
Frequently asked questions
What is the average cap rate in Vancouver?
Vancouver multifamily Class A cap rates run approximately 3.50–4.00% (CBRE Q1 2026, CBRE multifamily, Class A, Q1 2026). Class B product in the same market trades at roughly 3.50–4.00%. The lowest cap rates in Canada. Almost universally an appreciation play rather than an income one — and unusually, Class B trades at the same range as Class A. For context, the Canadian national high-rise Class A multifamily cap rate was 4.51% in Q1 2026. Cap rate is net operating income divided by purchase price, and it deliberately excludes your mortgage — so it describes the property rather than your financed position.
Is Vancouver a good market for rental investment?
At 3.50–4.00%, the honest question is what you want the property to do. If the cap rate sits below your mortgage rate you have negative leverage — the property earns less unlevered than the debt costs, so borrowing reduces your return and the property likely runs cash-flow negative. That can still be a sound long-term position if you are buying appreciation and mortgage paydown, but it should be a deliberate decision rather than a surprise at closing.
Why are cap rates in Vancouver at this level?
Canadian cap rates broadly reflect prices rising faster than rents over many years — yield is income over price, so when the denominator outruns the numerator the ratio compresses. The spread across Canada is narrow: Vancouver sits lowest at 3.50–4.00% Class A, most markets cluster around 4.25–5.00%, and Saskatoon tops the survey at 5.25–5.75%. CBRE also reports that multifamily yields rose across every segment in Q1 2026, led by Kitchener-Waterloo, Montreal and Vancouver.
What's the difference between Class A and Class B cap rates in Vancouver?
Class A is newer, well-located, professionally managed product; Class B is older stock with room for improvement. Class B generally trades at a higher cap rate as compensation for the work and risk — about 3.50–4.00% in Vancouver, against 3.50–4.00% for Class A. The gap varies a lot by market: in Vancouver, CBRE records Class B at the same range as Class A, while Ottawa's Class B spread is much wider. If you are comparing your own deal against a published benchmark, make sure you are comparing like with like.
Does this cap rate include my mortgage?
No — and that is intentional. Cap rate is net operating income divided by price, describing the property as if you paid all cash. That is what makes it comparable across buyers with different loans. To see what your specific financed position earns, use cash-on-cash return; to check whether a lender will fund it, use DSCR.