‘A deluge of supply:’ GTHA rent prices continue to fall as vacancy rate surges

Condo towers dot the Toronto skyline Jan. 28, 2021. THE CANADIAN PRESS/Frank Gunn

The GTHA rental market is now seeing its highest vacancy rate in five years, leading to lower rents across the city and prompting landlords to look for more creative ways to attract tenants.

According to the latest data from Urbanation for the first quarter of the year, a “deluge of supply” combined with slowing population growth has pushed vacancy rates among stabilized buildings to 5.4 per cent. That is the highest level since early 2021 when rates reached six per cent during the pandemic.

The regions availability rate, which includes both vacant units and occupied units where tenants have stated their intent to vacate, has climbed to a record high of eight per cent, according to the report.

Rents across the city have also declined to a four-year low, falling 3.8 per cent year-over-year.

After factoring in discounts such as free rent and cash bonuses, the price tenants pay has dropped to an average of $2,525 per month across all unit types. The incentives have reduced rents by 13 per cent, or about $379.

To attract new tenants, the report also found that 66 per cent of new rental developments are now offering increased incentives. Most commonly, landlords in 47 per cent of new rental projects are offering two months of free rent.

“Rental operators are grappling with a deluge of supply due to intense competition from the condo market and a surge in tenants moving to secure better deals,” Shaun Hildebrand, president of Urbanation, said in a news release.

“Supply pressures will persist this year as apartment completions remain high and population growth slows, creating a window of opportunity for renters to capitalize on improved affordability.”

Despite higher vacancy rates and softer rent prices, developers across the region have not slowed construction. In the first quarter of 2026, purpose-built rental construction increased by 12 per cent.

That is in contrast to the new condo market where there were no new projects launched in the first quarter of 2026 for the first time in decades.