If you own a rental unit in Hamilton and it sat empty longer than you expected this spring, you are not imagining things. Units that used to lease in a week are taking three or four. Showings that drew ten applicants now draw three. That shift is the single most useful thing in the CMHC Hamilton housing outlook this year, and it changes how you should price and manage your properties for the rest of 2026.
I run Found Spaces, and we manage more than 600 units across Hamilton and the surrounding area. I read the CMHC numbers the way any operator does, which is by asking one question: what does this actually change about how I run my building next month. Here is my read.
What the CMHC Hamilton housing outlook actually says
Two numbers matter most.
First, vacancy. The Hamilton area vacancy rate climbed to 3.6% in 2025, the highest it has been since the pandemic and above what CMHC itself had forecast. CMHC’s 2026 housing market outlook expects vacancy to hold around 3.0% through 2026 and 2027. Either way, we have moved off the sub-2% market that let landlords name their price. A tenant looking today has options they did not have two years ago.
Second, supply. Hamilton has roughly 4,200 purpose-built rental units under construction, and about 1,400 of them are scheduled to open in 2026. The bigger ones include a 261-unit building at 500 Upper Wellington Street on the Mountain and a 126-unit project near Upper Wentworth. These are professionally run, brand-new buildings with in-suite laundry, elevators, and lease-up incentives. When 1,400 fresh units hit the market in one year, they compete directly with the older stock most private landlords own.
The rest of the picture fits together. Overall Hamilton housing starts are falling, condo pre-construction is weak, and it is purpose-built rental construction that is keeping the cranes up. So the new supply arriving is disproportionately rental, aimed straight at your tenant pool. I wrote more about the vacancy shift in our note on rising Hamilton vacancy rates.
The gap between the CMHC average and what you can actually charge
Here is where landlords get tripped up. CMHC’s survey pegs the average two-bedroom rent in Hamilton near $1,700 for 2026, rising to about $1,740 in 2027, with rent growth around 2% a year. That number looks low, and it is, because the survey averages the entire stock, including long-tenured units where a rent-controlled tenant has been in place for years paying well below market.
What you can charge on a vacant unit is a different figure. Asking rents in Hamilton this spring ran closer to $1,650 for a one-bedroom and just under $2,000 for a two-bedroom, with downtown two-bedrooms pushing toward $2,300 and Stoney Creek or Ancaster landing around $1,750 to $1,800. So do not price a turnover off the CMHC average. Price it off what comparable vacant units in your specific pocket of the city are actually leasing for this month. We track this street by street, and the spread between neighbourhoods is wider than most owners assume. Our Hamilton rental market report breaks it down by area.
Where the new buildings hurt you, and where they do not
The construction boom is not a uniform threat. CMHC’s data shows vacancy is highest in buildings built after 2020 and in units near post-secondary campuses. Those are the units competing head-on with the shiny new rentals, and they are the ones sitting empty. Meanwhile, older stabilized buildings and family-sized units stayed tight.
That tells you exactly where to defend and where to push. A two-bedroom near McMaster or a glossy studio downtown is now fighting for the same tenant as a brand-new 261-unit tower offering a month free. A well-kept three-bedroom in a family neighbourhood in the east end is not. Family-sized units and character properties in established residential pockets are still your strongest hand, because nobody is building three-bedroom rentals at scale.
A real example from this spring
We took over a fourplex in Ward 3, in the lower city east of Gage Park, where the previous owner had two units vacant and had been holding out for $2,100 on two-bedrooms for two months. A new purpose-built building had opened fifteen minutes away and was offering one month free plus free parking. Nothing was going to move at $2,100 against that.
We repriced to $1,925, cleaned up the listing photos, offered a flexible move-in date, and leased both units inside two weeks to solid, screened applicants. Do the math. Two months of vacancy on two units is more than $8,000 gone. A $175 monthly haircut is $4,200 over a year. Holding out for the higher number was the expensive choice, and it usually is. An occupied unit at a fair rent beats an empty one at your dream rent every time.
What to do for the rest of 2026
A few things I would act on now if you self-manage:
- Renew before you re-lease. The 2026 rent increase guideline is 2.1%, down from 2.5% last year and the lowest in four years. That is thin. But a 2.1% bump on a good tenant who stays beats a turnover that leaves you empty for six weeks in a 3.6% vacancy market. Keeping people is cheaper than replacing them right now.
- Price to this month, not last year. The market that let you add $200 on turnover is gone for most unit types. Check live comparables in your exact neighbourhood before you set an asking rent.
- Compete on the things new buildings cannot fake. Fast maintenance response, a responsive landlord, flexible move-in, a clean and honest listing. Tenants with choices reward that.
- Handle deposits correctly. You can collect last month’s rent as a deposit in Ontario. There is no such thing as a legal damage deposit here, so do not try to charge one. Getting this wrong invites a dispute you will lose.
Why owners hand this to us right now
A softer market punishes small mistakes that a hot market used to hide. Overpricing, slow turnovers, a listing that photographs badly, a screening process that is either too loose or quietly non-compliant with the Human Rights Code. At Found Spaces we lease against the new buildings every week, so we know what incentives they are running and what rent will actually move a given unit in a given pocket of Hamilton. That is the whole job in a year like this. You can see how our rental property management works if you want to compare notes.
The rental construction boom is good for the city and it is real competition for landlords. It does not have to cost you money. It costs you money when you price to a market that no longer exists.
If you own a Hamilton rental and you are not sure whether your rents are set right for where the market actually is, send me a note. I am happy to give you an honest read on your building, no pressure either way.
Kate Mackay is the founder and CEO of Found Spaces Property Management, managing over 600 rental units across Hamilton, Stoney Creek, Ancaster, Dundas, and the greater Hamilton area. She built Found Spaces from the ground up starting in 2017 and specializes in full-service property management for residential landlords and real estate investors.
