Canada Housing Market

Toronto’s rental market is continuing to cool, with new data showing prices have dropped to their lowest level in years.

According to a new report from Rentals.ca and Urbanation, average asking rents in Toronto have fallen to their lowest level since May 2022, marking a 46-month low.

Rents Continue to Decline Across Toronto

The latest data confirms that Toronto is firmly in a downward rental trend.

• Rents have declined year-over-year across all unit types
• One-bedroom units saw some of the steepest drops
• Overall rents are now significantly below recent peaks

This aligns with a broader national trend, but Toronto’s decline is especially notable given how quickly rents surged during the post-pandemic boom.

Condo Rents Are Driving the Drop

A major factor behind falling rents in Toronto is weakness in the condo market.

• Condo rents across Canada are down 6.9% year-over-year
• Toronto saw the largest decline in one-bedroom rents among major markets

With a large portion of Toronto’s rental supply coming from investor-owned condos, this segment continues to have an outsized impact on overall pricing.

More Supply, Less Competition

Market conditions are shifting as more listings hit the market while demand softens.

• Increased rental inventory is giving tenants more options
• Competition between renters has eased compared to previous years
• Landlords are adjusting pricing to attract tenants

This marks a clear reversal from the highly competitive rental environment seen in 2022 and 2023.

Affordability Still a Challenge

Despite falling prices, affordability remains a concern for many renters.

Even with recent declines:

• Average rents are still elevated compared to pre-2021 levels
• Rent per square foot remains relatively high
• Unit sizes are shrinking, with the average unit now smaller than in previous years

This means that while rents are falling, the overall cost of living in Toronto remains high.

What This Means for Renters

The current market is creating new opportunities for tenants across the city.

Renters may now be able to:

• Negotiate lower monthly rents
• Secure better units or locations
• Include conditions or incentives in lease agreements

For many, this is the first time in years that rental conditions have started to favour tenants rather than landlords.

What This Signals for the Toronto Housing Market

Toronto’s rental slowdown reflects a broader shift happening across the housing market.

As both home prices and rents soften, the market is moving away from peak conditions and into a more balanced phase.

However, with affordability still stretched and economic uncertainty lingering, the recovery in demand may remain gradual.

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References

Rentals.ca & Urbanation. (2026, April). Asking Rents in Canada Decline for 18th Consecutive Month Rentals.ca April 2026 Rent Report.

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