Toronto and Vancouver asking rents dipped to their lowest average price since 2022 this November, a new report has found.
Nationally, listed rents reached their lowest point since 2023.
Toronto monthly prices averaged $2,521, with one-bedrooms costing $2,222 and two-bedrooms costing $2,828, according to the national rent report by Rentals.ca and Urbanation.
Prices for one-bedroom apartments dipped just 0.3 per cent compared to the month prior, but they were down 6.4 per cent compared to the same time last year.
Two-bedroom apartment prices dipped 0.8 per cent compared to the month prior, but they were down 8.5 per cent from the same time last year.
Giacomo Ladas, associate director of communications at Rentals.ca, said analysts are confident prices will continue decreasing on a year-over-year basis for the next few months.
“We are still seeing a ton of new supply come into the market,” he said, referring both to purpose-built rentals and condos that were originally intended to sell, but are now being rented out due to the condo crash.
The report noted record apartment completions have increased competition among landlords.
Ladas said incentives — such as months of free rent or free Wi-Fi — to attract tenants have become widespread among rental operators, while reducing prices is a “last resort” for property managers.
Incentives were most popular during the pandemic, and Ladas believes they are “here to stay.”
Demand, meanwhile, is at “one of the lowest levels” seen since 2021, Ladas said.
“A big part of that, of course, is the slowdown of international students that have come into the country,” he said, adding the market typically slows in the winter.
Demand has also decreased in the short-term due to affordability issues and weakened consumer confidence, the report said, something Ladas believes is especially true in Toronto and Vancouver.
He noted Toronto and Vancouver’s rental markets have mirrored each other; both cities saw rent prices soar in 2021 and 2022 due to an “undersupply” of housing, prompting renters to leave the provinces for more affordable areas, and both cities have since worked to bring more supply to the market.
The report also called purpose-built rental apartments “the most stable” in the market.
In Toronto, condo rental prices have fluctuated more, Ladas said, particularly because they have been more prone to price reductions.
“A lot of these condos were not even intended to be for rent,” he said.
Buyers who wanted to sell the units, but who haven’t been able to, may be renting them out instead to recoup some of their costs. And if they’re not getting a tenant fast enough, they might be a “little more antsy” and offer a more favourable price, he said.
Prices for purpose-built rental apartments have, comparatively, remained more stable, he said.
