Rent prices in Toronto dipped slightly in mid-2024, giving hope for more affordable housing. Despite this small drop, rents have not fallen as much as renters were expecting and remain relatively high across the city. Here are some of the factors affecting the market:
Low Supply of Affordable Units
New purpose-built rentals were completed in 2024, but high construction, land, and financing costs mean most units are expensive. Middle- and high-income renters can afford these new apartments, but lower-income tenants remain in older, cheaper buildings where rents have not dropped.
New purpose-built rentals were completed in 2024, but high construction, land, and financing costs mean most units are expensive. Middle- and high-income renters can afford these new apartments, but lower-income tenants remain in older, cheaper buildings where rents have not dropped.
Higher Tenant Turnover
Toronto’s rent-controlled market limits increases for existing tenants. When a tenant leaves, landlords can charge new tenants more. Increased turnover has recently pushed average rents higher.
Toronto’s rent-controlled market limits increases for existing tenants. When a tenant leaves, landlords can charge new tenants more. Increased turnover has recently pushed average rents higher.
Slower Construction
Construction of new rental units has slowed, reducing supply. With strong demand and limited availability, landlords can maintain higher rents.
Construction of new rental units has slowed, reducing supply. With strong demand and limited availability, landlords can maintain higher rents.
Growing Population
Toronto continues to attract newcomers, many of whom rent before buying. Even with slower immigration, ongoing population growth keeps pressure on the rental market, especially for affordable units.
Toronto continues to attract newcomers, many of whom rent before buying. Even with slower immigration, ongoing population growth keeps pressure on the rental market, especially for affordable units.
Average Rent Figures Can Be Misleading
Average rents do not always reflect what tenants actually pay. Lower-priced units are rented quickly, while higher-priced units sit on the market. Rent-controlled units also skew averages, so reported averages may not match what a new tenant would pay.
Average rents do not always reflect what tenants actually pay. Lower-priced units are rented quickly, while higher-priced units sit on the market. Rent-controlled units also skew averages, so reported averages may not match what a new tenant would pay.
Looking Ahead
Significant decreases in Toronto rents are unlikely in 2026. Years of undersupply, high construction costs, and limited affordable land mean demand will continue to outpace supply. There is hope, however, as advocacy groups and policymakers work to implement funding and policies to improve housing affordability, which could bring some relief for renters in the future.
Significant decreases in Toronto rents are unlikely in 2026. Years of undersupply, high construction costs, and limited affordable land mean demand will continue to outpace supply. There is hope, however, as advocacy groups and policymakers work to implement funding and policies to improve housing affordability, which could bring some relief for renters in the future.