Cap rates by city in Canada
A 5% cap rate is a steal in Vancouver and full price in Saskatoon. Here is where apartment cap rates actually sit in 13 Canadian cities as of mid-2026, why they differ, and how to use them without fooling yourself.
The 2026 numbers
These ranges cover stabilized apartment buildings from Class A (newer, best locations) at the low end to Class B (older, working product) at the high end, compiled from brokerage survey data for the first half of 2026, primarily CBRE's quarterly Canadian cap rate survey. Nationally, that survey put average high-rise apartment cap rates near 4.5% for Class A and 4.8% for Class B in Q1 2026, with low-rise product slightly higher.
| City | Apartment cap rate | Market note |
|---|---|---|
| Vancouver | 3.5% – 4.0% | Lowest in Canada; land value dominates |
| Toronto | 3.9% – 5.2% | Class A high-rise at the low end |
| London | 4.0% – 5.0% | University demand, small market |
| Victoria | 4.25% – 5.0% | Tight vacancy, limited supply |
| Montreal | 4.25% – 5.25% | Large plex market; wide quality spread |
| Quebec City | 4.25% – 5.75% | Stable but less liquid than Montreal |
| Kitchener-Waterloo | 4.5% – 5.0% | Tech employment, student demand |
| Winnipeg | 4.5% – 5.25% | Steady income market |
| Calgary | 4.5% – 5.5% | No rent control; migration-driven |
| Edmonton | 4.5% – 5.5% | Higher yields, flatter price growth |
| Halifax | 4.5% – 5.5% | Fast rent growth has compressed caps |
| Ottawa | 4.5% – 5.8% | Government employment floor |
| Saskatoon | 5.25% – 6.75% | Highest of the surveyed majors |
Survey estimates for institutional-quality, stabilized buildings, first half of 2026. Individual sales regularly print outside these bands. We update this table as new quarterly surveys are released.
Why the same building yields 3.5% in Vancouver and 6% in Saskatoon
A cap rate is a price for a stream of income, and buyers pay more (accept a lower cap rate) where they believe the stream will grow. Four forces do most of the work. Expected rent growth: markets with chronic housing shortages and strong in-migration let buyers underwrite rising NOI, so they pay up today. Land value: in Vancouver and Toronto a big share of the price is the dirt, which produces no rent but holds redevelopment value. Liquidity: big markets have deep buyer pools, so owners accept a lower yield in exchange for being able to sell quickly at a fair price. And risk: smaller markets, older buildings, and single-industry towns must offer more income per dollar to attract capital at all.
Policy shows up in the numbers too. Alberta has no rent control, which lets owners re-price to market every year and is part of why capital has chased Calgary and Edmonton despite higher yields elsewhere historically. Ontario, BC, and Quebec cap increases on sitting tenants, so a building full of long-term tenants at below-market rents earns a lower effective yield than its pro forma suggests, and sophisticated buyers price the gap.
The published numbers are not about your duplex
Survey cap rates describe professionally managed apartment buildings with full expense loads: management, staff, reserves, the works. Small residential rentals sit in a different market. A condo or single-family rental competes with owner-occupiers who pay for granite counters, not yield, so investor purchases in those segments often pencil to cap rates well below the local apartment band. Run the math honestly with our cap rate calculator (including management, even if you self-manage) and do not be surprised if a Toronto condo comes out under 3%. That number is telling you the truth: the deal depends on appreciation, not income.
Watch the spread against your mortgage rate
The most useful comparison for a leveraged buyer is the cap rate against the interest rate on the mortgage. When the cap rate is higher, borrowing amplifies your return; when it is lower, every borrowed dollar earns less than it costs, and leverage works against you. That negative-leverage math is exactly what low-cap-rate buyers in Vancouver and Toronto have been accepting: they are betting rent growth closes the gap before it bleeds them. To see the effect on a real deal, put the same property through the rental property calculator, which computes cash flow and cash-on-cash return with the actual Canadian mortgage formula.
Frequently asked questions
What is a good cap rate in Canada in 2026?+
There is no single good number, only a fair number for a given market. Institutional apartment buildings trade around 3.5% to 4% in Vancouver, 4% to 5% in Toronto and Montreal, and 4.5% to 5.5% or higher in the Prairies and Atlantic Canada. A deal is good when its cap rate beats recent sales of comparable properties in the same city after you rebuild the NOI with honest expenses, not when it beats a national average.
Why are Vancouver and Toronto cap rates so low?+
Buyers there accept less income per dollar because they are paying for expected rent growth, land value, and liquidity. Scarce land, strong in-migration, and deep buyer pools mean prices get bid up faster than rents, which mathematically pushes cap rates down. The bet is total return: less cash yield now, more appreciation later. Whether that bet is priced correctly is exactly what you should question, not assume.
Why is my condo's cap rate even lower than the published numbers?+
Published surveys track professionally managed apartment buildings bought for their income. Single condos and houses compete with owner-occupiers, who pay for a home rather than a yield, so investor buyers in those segments routinely accept cap rates a full point or more below the local apartment range, sometimes under 3% in Toronto and Vancouver. That is not a bargain sign; it usually means the deal only works if prices keep rising.
Is a higher cap rate always better?+
No. A higher cap rate is compensation for something: slower expected growth, an older building with bigger capital costs, a smaller and less liquid market, or tougher tenancies. Saskatoon at 6% is not free money compared to Vancouver at 3.75%; it is a different risk being priced. The mistake to avoid is paying a low-cap-rate price for a high-cap-rate-quality property.
Where do these numbers come from?+
The ranges compile brokerage cap rate surveys, primarily CBRE's quarterly Canadian Cap Rates & Investment Insights survey (Q1 2026 data), which polls investment professionals on where stabilized apartment product would trade in each market. Survey figures are estimates for institutional-quality buildings, so treat them as a benchmark band, not an appraisal of any specific property.