For the last few years, Canada has been building aggressively.
More apartments.
More condos.
More purpose-built rentals.
More infill.
More density.
But new Statistics Canada data suggests that construction intentions are finally beginning to slow.
In July 2026, the total value of building permits issued across Canada fell 17.3% to $12.2 billion.
Residential permits were also down, with multi-family projects accounting for most of the residential decline.
For real estate investors, this matters because new supply has been one of the biggest forces affecting rents, vacancies and property values across the country.
Today, Wayne and Gabby break down what the slowdown could mean, particularly for Edmonton and Alberta.
Statistics Canada reported that the total value of building permits across Canada declined sharply in July.
Residential permit values fell as well, including a significant decline in multi-family construction intentions.
Alberta also experienced a meaningful monthly decline in total permit values.
The important distinction:
A permit is not a completed building.
It represents an intention to build.
A project may still be delayed, redesigned, refinanced or abandoned altogether.
That means the rental supply already under construction is still coming.
But fewer new projects entering the pipeline could eventually help the market rebalance.
Wayne's concern is not that Edmonton suddenly stopped building.
Far from it.
There are still a significant number of purpose-built rental projects already under construction or far enough through the development process that they are likely to hit the rental market.
Those buildings still need to be completed.
Then they need tenants.
The question is:
How long will it take for Edmonton to absorb all of that new rental supply?
Wayne believes it could take several years.
Wayne discusses several reasons developers may be becoming more cautious.
Financing costs have changed.
Construction costs have increased.
Rents have softened in some segments.
Vacancy has increased.
And developers now have to consider the large amount of competing inventory already coming onto the market.
A project that looked great two years ago may look very different today.
That becomes particularly important when a development was financed using construction or bridge financing and the permanent financing available at completion no longer produces the same numbers.
Wayne and Gabby share a recent example from one of their own townhouse investments.
Shortly after purchasing units in the complex, the condominium corporation received an updated roofing quote.
The final cost came in approximately $90,000 higher than expected.
The condo corporation responded by temporarily increasing condo fees rather than issuing a large special assessment.
The lesson was not really about condo fees.
It was about construction costs.
If replacing shingles on a townhouse complex can suddenly cost substantially more than anticipated, developers working on multi-million-dollar projects are facing the same problem on a much larger scale.
A few years ago, Edmonton had the opposite problem.
Vacancy was extremely low.
Rental supply was tight.
Tenants were struggling to find housing.
Rents were increasing quickly.
Government and developers responded by creating and building more housing.
Wayne and Gabby believe the market may now have moved too far in the opposite direction.
The supply shortage was addressed.
But construction kept coming.
That creates a period where landlords may need to compete harder for tenants while the market absorbs the new units.
Wayne believes rents will continue softening in certain segments of the market.
But he does not believe every rental property will be affected equally.
The largest pressure may fall on property types facing the most new competition.
That includes:
There are simply more choices available to renters.
At the same time, Wayne sees a different opportunity developing in full-house rentals.
If tenants search the market and see hundreds of smaller suites but very few full houses with basements, garages and yards, demand can shift toward the scarcer product.
That is an important distinction.
Saying:
"Edmonton rents are falling"
is too broad.
The better question is:
Which rents are falling?
Different asset classes can behave completely differently inside the same city.
This is ultimately a supply-and-demand story.
When rental supply is too low, rents increase.
Developers react.
Governments react.
Construction increases.
Eventually supply catches up.
Then supply can exceed short-term demand.
Vacancy rises.
Rents soften.
Developers become more cautious.
Construction slows.
Eventually the market moves toward balance again.
The cycle continues.
Real estate investors need to understand where they are inside that cycle.
During today's rapid-fire Q&A, Gabby asks Wayne directly:
Is the new construction boom finally slowing down?
Wayne's answer:
Yes.
But the bigger uncertainty is how long the effects will take to work through the market.
Hundreds of millions of dollars of projects are already permitted or underway.
Some will finish.
Some may not.
And the impact on rents and vacancies will take time to become clear.
Wayne estimates that Edmonton could take approximately five to six years to fully absorb the current wave of purpose-built rental supply and return to the type of vacancy environment he considers more balanced.
That is Wayne's estimate, not an official forecast.
The timeline could change significantly depending on:
The episode closes with a listener asking how much cash flow a rental property should have.
Wayne points back to the 5% Rule™.
The reason he focuses so heavily on cash flow is not because he views it as spending money.
He views cash flow as protection.
If rent falls by $200 but the property was producing $500 per month, the investor still has room.
If the property was only producing $100, that same rent decline pushes it negative.
Multiply that across a large portfolio and small differences become significant.
Wayne describes cash flow as the ultimate risk mitigator.
It protects investors against:
Investors cannot control all of those variables.
But they can control how much margin they build into the property when they buy it.
A listener also asks about Fort McMurray.
Wayne says he has heard positive things recently about rental demand in the market.
However, he remains cautious because Fort McMurray has historically been a more cyclical, boom-and-bust market.
For Wayne, predictability matters.
He prefers markets where he feels more confident about long-term tenant demand and the sustainability of the rental business.
Want to understand how much cash flow Wayne believes a rental property should have?
Search:
The 5% Rule by Wayne Hillier
on Amazon.
Today is the final day to receive 50% off Gabby's Remote Property Management Course.
The eight-module online course teaches the systems Wayne and Gabby use to self-manage their rental portfolio remotely.
Use code:
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at:
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Questions:
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