Most realtors have a part of their business that includes rentals. New agents often rely on them as a way to earn income and build a client base. You usually start by representing tenants, and as your business grows, you find yourself working less with tenants and more with landlords.
For me, after 16 years, most of the rentals I handle now are on the listing side.
You may ask why I’m bringing this up. Well, I currently have a front-row seat to a shift in the rental market that I’ve never witnessed before.
Not too long ago, I would list a unit and receive offer after offer — often with tenants willing to pay over asking, depending on location.
(Yes… location, location, location.)
However, over the last 18 months, we’ve seen a noticeable change. Rents across the city have fallen to a 40-month low, marking 21 consecutive months of annual declines. It’s the lowest level since summer 2022, with the average unit now sitting at $2,551, down 3.5% year over year.
And while Toronto still ranks among the most expensive cities in the country, these drops are outpacing the national average. Two-bedroom units — the work-from-home hero of the pandemic — saw the sharpest correction, sliding more than 7% to $2,890. One-bedrooms dropped 5.7%, and even three-bedrooms declined 4.6%.
(Keep in mind: this is an average — plenty of two-bedrooms in certain pockets are still commanding north of $3,100.)
So, the question becomes: Why the shift?
A few things I’m seeing and hearing from the front lines:
Developers are responding to federal incentives and bringing more purpose-built rentals to market.
Unsold condos are quietly being added to the rental pool.
Supply is rising, demand has cooled, and landlords are adjusting.
Incentives are back — free rent months, utilities, even complimentary internet.
Some areas, like East York, have seen drops as steep as 13.5%. Across Ontario, rents are down 2.2% year over year, with the province still ranking just behind B.C. in overall cost.
What stands out most to me is a shift in consumer mindset. Even with employers nudging people back to the office, renters are prioritizing affordability over convenience. If it saves a few hundred dollars a month, they’ll take the extra 30-minute commute.
I’ve personally seen units sit for 20+ days — only to be leased within 24 hours after the landlord dropped the asking rent by just $100.
The fact is, all markets move in cycles. Whether it’s resale homes, stocks, or even used cars, there will always come a point where prices flatten or decline. Sometimes the market simply needs to take a breather.
If you’re navigating the market — renting, listing, or trying to make sense of what this means for your next move — feel free to reach out.
The Morris Code: Live. Buy. It.
