Imagine you are standing in Vancouvers -family market. You have two options. On one side you see a brand development with modern finishes and energy-efficient systems. On the side you see an old 1970s walk-up with low rents and a lot of potential.
Which one should you choose? This is a decision for investors in Vancouver in 2026. 24,000 rental units are coming to the market in the next two years. The vacancy rate is at 3.7 percent and construction costs are around $400 to $475 per foot. So it is really important to think about whether to build something new or buy an existing building.
The Vancouver Context: A Market at a Crossroads
Vancouver’s multi-family market is changing. After years of very low vacancy and rising rents the market is now adjusting to a lot of new construction. In 2025 the city saw the new rental units in forty years. The vacancy rate is now at 5.0 percent overall. It varies by building type. The nicer buildings are seeing a vacancy rate of 11.6 percent while the older buildings are seeing a vacancy rate of 2.7 percent.
What does this mean for you? If you build something you might have trouble renting it out. Investors are looking for returns to make up for the fact that rents might not be as high next year. You need to understand what is happening in the market before you make a decision.
New Build Multi-Family: The Shiny New Toy
New buildings are nice because they have amenities like in-suite laundry and fitness centers. These things attract tenants who’re willing to pay more. New buildings are also having trouble renting out units. The vacancy rate for buildings is almost 40 percent. It is taking a time to fill these buildings and developers are not getting the rents they thought they would.
CMHC MLI Select Incentives
There is a program called CMHC MLI Select that can help with financing for buildings. You can get a loan with an interest rate and a long repayment period. You have to meet certain standards for energy efficiency. If you do you can get a discount on your loan. This can be a help for new construction projects.
However building something is expensive
The cost of construction in Vancouver is very high. It can cost between $400 and $475 per foot to build a wood-frame multiplex. It takes a long time to build something new. You have to consider all these costs and risks when you are deciding whether to build or buy.
Existing Multi-Family: The Value-Add Opportunity
Existing buildings are another option. They often have purchase prices and a lot of potential for renovation and improvement.
For example:
- There is a building called The Maples in Marpole that has 38 units.
- Twenty-seven of the units have already been renovated.
- The rents are still lower than market rate.
This means there is room to increase the rents and make money.
Lower Purchase Price and Value-Add Potential
Another example is the Aldon Apartments in Vancouvers West End. This building has 23 suites. Is a good opportunity for investors who want to add value. The building needs some work. It is priced low enough that you can make some repairs and increase the value.
Renovation and Rent Growth
Existing buildings can be a choice because you can make them more valuable by renovating them. You can increase the rent. Make more money. And existing buildings are often fully rented so you can start making money away.
The CMHC MLI Select program is also available for existing buildings. You can get a loan with an interest rate and a long repayment period if you agree to make some energy-efficient upgrades. This can be a help for existing building owners.
CMHC MLI Select for Existing Buildings
Existing buildings also have some challenges. They often need repairs and maintenance which can be expensive. There are rules in Vancouver about how much you can raise the rent, which can limit your income.
The Catch: Deferred Maintenance and Renovation Costs
So which is better? New. Existing multi-family?
It depends on what you want and what you’re willing to take on. If you have a lot of money and are willing to wait building something might be a good choice. If you want to make money right away and are willing to do some work an existing building might be better.
Head-to-Head Comparison: New Build vs Existing Multi-Family
Here is a comparison of new build and existing multi-family:
Purchase price: New build is more expensive, existing buildings are less expensive.
Cap rate: Existing buildings often have higher cap rates
Vacancy risk: New builds have higher vacancy rates
Maintenance: New builds need maintenance at first but existing buildings need more work
Renovation potential: Existing buildings have potential for renovation and increase in value
MLI Select points: New builds can get points for energy efficiency existing buildings can get points for energy retrofits and affordability
Rent growth: Existing buildings have potential for rent growth
Construction timeline: New builds take longer to construct existing buildings are ready to rent out away
Which Strategy Wins in 2026?
The answer to which strategy is better depends on you. If you have a lot of money and are willing to wait new construction might be a choice. If you want to make money right away and are willing to do some work existing buildings are a good option.
Some people think that the market is just going through a cycle and will recover. As one expert said, “This is a normalization after an overheated period it’s not a structural weakening”. The market will eventually get better. When it does well-located and well-managed properties will do well.
Conclusion
In conclusion the decision to build something or buy an existing building in Vancouvers multi-family market is a big one. You need to think about the market, your goals and what you are willing to take on. New builds have amenities and can get financing help but they are expensive and have high vacancy rates.
Existing buildings have purchase prices and potential for renovation but they need work and have rules about rent increases. Whether you build or buy Vancouvers multi-family market is still a place to invest if you know what you are doing.
Frequently Asked Questions (FAQs)
New builds have modern amenities that attract tenants, lower immediate maintenance costs and can get financing help from CMHC MLI Select.. They have high vacancy rates and are expensive to build.
Existing buildings have purchase prices, potential, for renovation and increase in value and can get financing help from CMHC MLI Select. They also have vacancy rates and can make money right away.
Yes, you can get this financing for existing buildings. You just have to agree to rent some of the units at a price than normal and you have to make some changes to save energy. Before you start making these changes CMHC needs you to get an audit that shows how energy you can save.
The overall vacancy rate is 5.0 percent, which's the highest it has been in a long time. It really depends on the kind of building. If it is a nice building the vacancy rate is 11.6 percent. If it is an older building that is not in great shape the vacancy rate is only 2.7 percent.
After September 30 2026 CMHC is going to start using rules for energy efficiency. If you want to use the rules, which are easier to follow you have to sign up before September 30 2026.
Co-Founder & Director
Hafil Perincheeri is an engineer-turned-realtor, investor, and builder based in Calgary, Canada. As Co-Founder and Director of Greencasa, he specializes in home flips, property development, and investment strategies. Since 2019, he has guided clients in home buying, multifamily investing, and financing options like CMHC and MLI Select, ensuring transparent, informed decisions.