If you own an apartment building in Ontario right now, three things have moved in the last few months that I think genuinely change how you should be thinking about your portfolio:

• Bill 60 has reshaped what an eviction actually looks like,
• The 2026 rent increase guideline has dropped to 2.1%, and,
• The Bank of Canada has now held its overnight rate at 2.25% for three consecutive decisions.

Individually, none of these is a headline-grabber. Together, they tell a fairly clear story about where the operating margin in this asset class is going, and where the risk has quietly shifted.

I want to walk through each, then talk about what it means for buy, hold, and sell decisions over the next 30 to 90 days.

Bill 60: a faster eviction process, but read the fine print

Bill 60 is the most consequential change to Ontario's landlord-tenant framework in several years, and there are a few details that have been widely misreported, so I want to be precise.

What actually changed. Under Bill 60, a landlord can now file for eviction for non-payment of rent after a 7-day N4 notice period, down from 15 days. The window for a tenant to appeal an eviction order has been cut from 30 days to 15. For personal-use evictions where 120 days' notice is given, the previous compensation requirement has been removed. And at hearings, a tenant must now pay 50% of the disputed arrears before being permitted to raise issues like maintenance failures as a defence. (Globe and Mail coverage of Bill 60, Canadian Centre for Housing Rights summary)

What did not change. The government's initial proposal to eliminate automatic month-to-month tenancy conversions was withdrawn before passage. Tenancies in Ontario still automatically continue month-to-month after the initial term — that protection is intact. (Global News)

My read. This is a meaningful operational improvement for owners with quality buildings and disciplined property management — bad-debt recovery cycles get shorter, and the cost of a problem tenancy goes down. But it does not change the fundamental economics of rent-controlled inventory, and I'd be cautious about underwriting deals on the assumption that turnover will materially accelerate. The N4 timeline is faster, but the LTB's hearing backlog is the actual bottleneck, and Bill 60 doesn't directly resolve that. If you're buying, ask the seller for arrears aging and N4-to-resolution timelines on the actual building, not a provincial average.

The 2026 rent increase guideline: 2.1%, down from 2.5%

The 2026 guideline has been set at 2.1%, down from 2.5% in 2025. (Ontario rent increase 2026) The guideline is tied to the Ontario CPI, and the lower number reflects the inflation cooling we've seen through late 2025 and into early 2026.

This matters more than people give it credit for. On a building with $1.5 million in gross rents from rent-controlled units, the difference between a 2.5% and a 2.1% lift is about $6,000 in NOI in year one.  What is more, because that gap compounds against your operating cost base (which is rising more than 2.1% in most line items I'm seeing), it puts pressure on margin. Insurance premiums in Ontario multifamily are still climbing faster than headline CPI, property tax reassessments in several municipalities are catching up after years of stability, and utility costs on uplifted buildings are not slowing down.

If you own rent-controlled stock and you are not actively reviewing your AGI eligibility, you are leaving money on the table. Capital expenditure-driven AGIs remain available, are typically capped at 3% above the guideline annually, and are usually spread over three years. (Ontario AGI guide) For buildings where you've done meaningful capital work in the past 18 months - think roof, windows, boilers, elevators - that filing window matters.

The Bank of Canada is on hold, and the 5-year is the number to watch

The Bank of Canada held its overnight rate at 2.25% at its most recent decision and has now been on hold for three consecutive announcements. (Bank of Canada, WOWA rate tracker) Bay Street consensus and the prediction markets are pricing the April 29 decision at near-certainty for no change, and the forward curve suggests the policy rate stays roughly here through 2026. (RBC Economics)

For multifamily underwriting, the overnight rate matters less than the 5-year Government of Canada bond yield, because that's what drives both conventional and CMHC-insured term financing. The 5-year was at 3.12% on April 7, 2026. (Bank of Canada selected bond yields) That's notably above the overnight rate and it tells you the bond market expects rates to drift higher, not lower, over the medium term.

What this means for cap rates. With the 5-year stuck above 3% and likely staying there, I do not see a near-term catalyst for cap rate compression in Ontario multifamily. The "wait for rates to fall" thesis that drove a lot of 2024 and early 2025 buyer behaviour has effectively played out.  Rates have stabilized, but they haven't fallen the way bullish underwriters were hoping. For sellers waiting for a 50-basis-point cap rate move in their favour before listing, my honest view is that you may be waiting longer than your hold horizon comfortably allows.

Vacancy and rent growth: balanced, not booming

CMHC's outlook is for Ontario rental markets in 2026 to be "broadly balanced," with vacancy rates running between roughly 3% and 5% across the province. (CMHC Housing Market Outlook) Toronto's 2025 vacancy hit 3.0% which is above the long-run average and the highest non-pandemic reading since 2004. Ottawa is projected at roughly 3.1% by 2026. Some parts of the Ontario manufacturing corridor (Windsor, parts of London, Sarnia) is running closer to 4%, well above the national average. (CMHC mid-year update)

The driver is on the demand side: reduced non-permanent resident inflows are softening rental absorption in markets that had been most reliant on that population growth. New supply is also finally catching up after several years of starts. Rent growth on turnover is cooling, and landlords are quietly competing on incentives with things like free months, parking, locker fees waived just to maintain occupancy in newer builds.

What I'd be doing right now

• If you're holding. This is the year to tighten operations rather than wait for the market to do the work for you. Review every line item, push your AGI applications where the capital spend supports it, audit your insurance and tax assessments, and benchmark your management fees. The 2.1% guideline plus a held BoC rate means margin has to come from inside the building.
• If you're buying. Underwrite to where rates actually are, not where you hope they'll be. I'd use a 5.25–5.75% all-in financing assumption on conventional 5-year term debt today, and I'd stress-test at 6%. Ask for full N4 history and arrears aging on every deal. In secondary markets with 4%+ vacancy, build a real lease-up reserve into the model — not a token 2%.
• If you're selling. I'd revisit any expectation of cap rate compression in 2026 and decide whether your hold thesis still works at today's pricing. For owners who've held strong assets for 8+ years and are looking at a tax-driven decision, the combination of a held rate environment and a stable buyer pool actually makes this a more transactable market than late 2024 was. Buyers are back, but they are disciplined.

The bottom line

April 2026 is not a dramatic month for Ontario multifamily, and that's actually the story. The Bank of Canada is telling you rates aren't the lever anymore. Bill 60 is telling you operations and tenant management are. The 2.1% guideline is telling you that organic rent growth on rent-controlled stock isn't going to bail out a thin underwriting model. The owners who do well over the next 12 months will be the ones who treat this as an operating business, not a leveraged bet on a rate cut that isn't coming.

Terry Riddoch

If you'd like to talk through how any of this applies to a building you own or one you're considering, I'm always happy to walk through the numbers.

Terry Riddoch Real Estate Broker — Multifamily & Investment Properties, Ontario 📞 519 591 1725 📧 [email protected] 🌐 terryriddoch.ca

Sources

• Bank of Canada   Policy interest rate and Selected bond yields
• WOWA  Bank of Canada Interest Rate tracker
• RBC Economics  BoC on hold while the Fed moves towards the sidelines
• CMHC  Housing Market Outlook 2026 and 2025 Mid-Year Rental Market Update
• The Globe and Mail  Ontario legislators have passed Bill 60
• Canadian Centre for Housing Rights  Understanding your rights as a tenant under Bill 60
• Global News  Ontario scraps controversial plan that threatened evergreen leases
• Ontario rent increase guideline 2026  neoBanc and LearnOntario AGI guide