Cap rates by city / Victoria
Victoria cap rates in 2026
Apartment buildings in Victoria traded at cap rates of 4.25% to 5% in CBRE's second-quarter 2026 survey, 4th lowest of the 13 Canadian cities CBRE surveys. Here is what sits behind that number, what CMHC says about vacancy and rents, and what a building is worth at the local yield.
Apartment cap rate
4.25% to 5%
CBRE, Q2 2026, Class A to B
Vacancy rate
3.3%
CMHC, October 2025
Average two-bedroom rent
$2,120
CMHC purpose-built, October 2025
Rent growth, 2025
5.1%
CMHC, two-bedroom, year over year
Run a Victoria building through the calculator
Preloaded with a six-unit building at Victoria's CMHC average two-bedroom rent, the city's vacancy rate, and generic expense assumptions ($1,800 tax and $600 insurance per unit, 8% maintenance, 5% management, $900 utilities per unit). The price is set so the building lands at the middle of the local range. Replace every number with your own.
Property & income
What you would actually pay, not the assessment
All units combined
Operating expenses (annual)
Of gross rent; 5–10% is typical
0 if self-managed
Condo fees, snow, lawn care
Your market
What similar properties trade at in this market
Cap rate
4.63%
$107,960 NOI on $2,334,000
Cap rate deliberately ignores financing: it is NOI divided by price, so you can compare properties regardless of how each buyer pays. The implied value inverts it: the price at which this NOI would hit your target cap rate. Useful as a negotiating anchor.
What the same building is worth across the range
The six-unit example above produces $107,960 of net operating income a year. Value is NOI divided by cap rate, so a half-point move in the market's cap rate changes the price by more than most renovations would:
| Cap rate | Building value |
|---|---|
| 4.25%low end | $2,540,228 |
| 4.63%middle | $2,334,263 |
| 5%high end | $2,159,194 |
Per unit: $423,371 at the low end to $359,866 at the high end.
Why Victoria trades where it does
Victoria trades 75 basis points or so above Vancouver. It has the same land constraints (an island, a harbour, agricultural reserve) but a smaller buyer pool, less liquidity and a slower-growing economy anchored by government and retirees. The 4.25% to 5% range reflects a market buyers like for stability rather than growth.
Vacancy, rents and the 2026 outlook
Vacancy rose to 3.3% in October 2025, the highest since 1999, as completions caught up with demand. Two-bedroom rents still grew 5.1%, faster than Vancouver, because Victoria started from a tighter base. With BC's 2.3% cap on sitting tenants and turnover slowing, expect income growth to converge toward the guideline in 2026.
Rent rules in British Columbia
BC caps rent increases on sitting tenants at 2.3% for 2026, with three months' notice. Rent resets to market only when a tenant leaves. That rule sets how fast in-place income can grow, which is why two buildings with identical rent rolls can trade at different cap rates depending on how far below market their tenants sit.
Cap rate against your mortgage rate
At a 4.63% cap rate, a mortgage costing more than 4.63% makes leverage work against you: every borrowed dollar earns less than it costs until rents grow. In Victoria that is roughly a wash at 2026 mortgage rates, so cash flow depends on the down payment and how far below market the rents sit. Put the same building through our rental property calculator to see the cash flow with the Canadian semi-annual mortgage formula.
Frequently asked questions
What is the average cap rate in Victoria, BC?+
Apartment buildings traded between 4.25% and 5% in CBRE's Q2 2026 survey, and Victoria was one of only two markets to move that quarter, with low-rise Class B up 13 basis points. A condo or house rented by an individual investor typically produces 3% to 3.5%.
Is Victoria cheaper than Vancouver for rental investors?+
Yes, on yield. Two-bedroom rent averaged $2,120 in October 2025 versus $2,363 in Vancouver, but prices are further below Vancouver's than rents are, which is why cap rates are higher. The trade-off is liquidity: fewer buyers means a longer sale when you exit.
How Victoria compares
| City | Cap rate | Vacancy |
|---|---|---|
| Vancouver | 3.5% to 4.75% | 3.7% |
| Toronto | 3.85% to 5.15% | 3% |
| Montreal | 4.25% to 4.75% | 2.9% |
| Victoria | 4.25% to 5% | 3.3% |
| Winnipeg | 4.5% to 5.25% | 2.8% |
| London | 4% to 6% | 4% |
| Calgary | 4.5% to 5.5% | 5% |
| Halifax | 4.5% to 5.5% | 2.7% |
| Quebec City | 4.25% to 6% | 2.4% |
| Edmonton | 4.5% to 5.75% | 3.8% |
| Ottawa | 4.5% to 5.8% | 3% |
| Kitchener-Waterloo | 4.5% to 6% | 4.1% |
| Saskatoon | 5.25% to 6.75% | 3.3% |
Sources: CBRE Canadian Cap Rates & Investment Insights, Q2 2026 (cap rate summary, high-rise and low-rise Class A to B); CMHC Rental Market Report, October 2025 survey. Survey ranges describe stabilized, professionally managed buildings; individual sales print outside them. Measure your own deal with the cap rate calculator.