Toronto Rental Market Report – Fall 2025 Insights

Estimated reading time: 8 minutes

Toronto's rental market softened in 2025 compared with the post-pandemic peak.

Condo rents eased, lease-up times increased, and tenants had more choice across several segments of the market.

For landlords, that changed the strategy. Pricing a rental based on the previous year's peak became riskier, while tenant retention, competitive positioning, and realistic market analysis became increasingly important.

What changed in Toronto's rental market in 2025?

Several factors came together at the same time: a record wave of condo completions, sharply lower new construction starts, moderating population growth, and the return of rental incentives.

The result was not an absence of rental demand, but a market in which tenants had more alternatives and landlords had to compete more actively for qualified renters.

A record wave of completions — not a new construction boom

Many of the condominium projects reaching completion in 2025 were started several years earlier, when interest rates were lower and investor demand for new units was substantially stronger.

According to Urbanation's Q1 2025 Condominium Market Survey , GTHA condominium completions reached 9,495 units in the first quarter alone, 67% above the 10-year average.

Full-year completions were projected to reach 31,396 units, which would represent another record year.

At the same time, new condominium construction had slowed dramatically.

Only 497 new condo units broke ground in the GTHA during Q1 2025, according to Urbanation — 88% below the 10-year average and the lowest quarterly total since 1996.

Units under construction had also fallen from 105,864 in Q2 2023 to 69,042 by Q1 2025 and 64,623 by Q2.

In other words, the rental market was absorbing the final stages of an earlier construction cycle while very little new supply was beginning behind it.

Toronto's crane count reflected the previous building cycle

Toronto's skyline still reflected the scale of the earlier development boom.

The RLB Crane Index for Q1 2025 counted 106 active tower cranes in Toronto's downtown core, with residential projects representing the majority.

But those cranes represented projects already underway rather than new development activity.

Urbanation also reported 23,918 unsold new condominium units in Q1 2025, 58% above the 10-year average.

That combination — high completions, high unsold inventory, and very low new starts — helps explain why conditions could soften in the short term even as longer-term supply concerns remained.

Population growth also moderated

Another part of the rental-demand equation was changing.

Canada admitted 104,256 permanent residents in Q1 2025 , the smallest first-quarter total since 2021.

Statistics Canada also reported a decline in the number of non-permanent residents in Ontario during the quarter, influenced in part by fewer study-permit holders.

Slower population growth meant less immediate pressure on rental demand than Toronto had experienced during the strongest post-pandemic years.

Rental incentives returned

Increased competition also showed up in the form of incentives.

According to Urbanation's Q2 2025 rental survey , 65% of purpose-built rental buildings completed since 2000 were offering incentives to tenants, up from 36% a year earlier.

These could include free-rent periods, parking incentives, or other concessions designed to improve leasing activity.

That matters because advertised rent does not always equal effective rent.

When comparing a privately owned condo or house with competing rental inventory, landlords need to consider the incentives tenants are being offered elsewhere.

One-bedroom condo leasing trends

Between January 1 and August 31, 2025, one-bedroom Toronto condo apartments leased for an average of $2,259 per month, according to The Habistat .

The median rent was $2,200, with the middle half of transactions falling between approximately $2,100 and $2,350.

Roughly 11,162 one-bedroom condo leases were recorded during the period.

• Average days on market were 24, with a median of 16.
• Approximately 9.7% of one-bedroom condos leased above list price.
• Nearly 80% of recorded leases closed between $2,000 and $2,499.

The figures illustrate a market where well-positioned units could still lease quickly, but landlords had less room to overprice and wait for tenants to catch up.

Two-bedroom condo leasing trends

Two-bedroom condo apartments leased for an average of $2,793, with a median of $2,650.

Transaction volume reached approximately 19,820 leases during the period.

• Average days on market were 24, with a median of 17.
• Approximately 10.1% of two-bedroom condos leased above list price.
• A large share of transactions occurred between $2,500 and $2,999.

Like the one-bedroom segment, the data pointed to more moderate pricing and less competition between tenants than during the strongest rental years earlier in the decade.

Freehold rental trends

Freehold properties — including detached, semi-detached, and row houses — represent a smaller portion of Toronto's rental market, but the same broader slowdown was visible.

One-bedroom freeholds

One-bedroom freehold rentals averaged approximately $1,788 per month, with a median of $1,750.

Average days on market reached 34, with a median of 24.

Approximately 13.5% of leases closed above the asking price.

Two-bedroom freeholds

Two-bedroom freehold properties averaged approximately $2,516 per month, with a median of $2,400.

• Average days on market were 32.
• Median days on market were 22.
• Approximately 15% of recorded leases closed above asking.

Freehold rentals had less competing inventory than the condo market, but properties could still take longer to lease when the asking price did not align with current demand.

What active listings showed in Fall 2025

Active inventory provided another indication of the amount of choice available to tenants.

For one-bedroom condos, approximately 1,270 active listings were recorded, with an average asking rent of $2,342 and a median of $2,300.

Two-bedroom condos had approximately 2,484 active listings, averaging $2,950 with a median asking rent of $2,750.

Condo listings were averaging roughly 26 days on market, with medians in the 17-to-19-day range.

Freehold rentals generally remained listed longer.

One-bedroom freeholds averaged approximately 41 days on market, while two-bedroom freeholds averaged approximately 38.

The practical implication was straightforward: tenants had options, and listings that were not competitive on price or property quality could remain available considerably longer.

What the 2025 market meant for landlords

A more competitive rental environment changes how landlords should approach pricing, leasing, and tenant retention.

Price from current evidence, not previous peaks

Rental pricing should be based on what comparable properties are actually leasing for now.

Using the previous year's peak asking rents can create an expensive sequence: extended marketing, lost rent, price reductions, and eventually leasing at a lower effective rent than could have been achieved with accurate pricing from the beginning.

Comparable leased properties are particularly useful because asking prices only show what owners hope to achieve.

Calculate the cost of vacancy

An additional $50 or $100 in monthly rent can look attractive until it produces several weeks of vacancy.

Landlords should compare the expected annual benefit of a higher rent with the full cost of rental vacancy , including lost rent, property preparation, leasing costs, and any incentives required to secure the next tenant.

Retention becomes part of the financial calculation

A reliable existing tenant has known payment and behaviour history.

Replacing that tenant introduces vacancy and a new set of unknowns.

That does not mean retaining the tenant is always the correct decision.

It means the financial value of retention should be compared with what the property could realistically achieve on the open market.

Property condition still matters

More supply gives tenants more ability to compare properties.

Responsive maintenance , clean presentation, appropriate updates, and clear communication can help a property compete without relying only on price.

Rent increases require both legal and market analysis

Ontario's rent increase rules establish the legal framework for applicable units.

The market determines whether applying an available increase is also the strongest financial decision.

In a competitive leasing environment, landlords should consider the tenant's current rent, current comparable rentals, the value of the proposed increase, and the likely cost of turnover together.

Key takeaways from Toronto's Fall 2025 rental market

• Pricing power weakened: relatively few condo and freehold leases closed above asking.
• Accurate pricing mattered: properties priced above current market conditions generally faced longer marketing periods.
• Vacancy became more expensive: slower absorption increased the cost of testing an aggressive asking rent.
• Tenant retention gained importance: reliable existing tenants had greater financial value when replacement could take several weeks.
• Property type mattered: condos faced heavier competing inventory, while freeholds generally experienced longer leasing periods.
• Condition and management still differentiated properties: tenants had more ability to compare price, quality, maintenance, and overall experience.

The bottom line

Toronto's rental market in 2025 was no longer operating under the unusually tight conditions seen earlier in the decade.

A large wave of previously planned housing reached completion just as population growth moderated and tenants gained more alternatives.

At the same time, new condominium construction starts fell sharply.

For landlords, the immediate lesson was not to predict exactly when the market would tighten again.

It was to manage the market that actually existed.

That meant pricing from current evidence, calculating vacancy carefully, maintaining competitive properties, and treating tenant retention as part of the investment strategy rather than simply a leasing decision.

Frequently Asked Questions

Was Toronto's rental market cooling in 2025?

Yes. The 2025 data used in this report showed moderating condo rents, longer lease-up periods, more active inventory, and a return of incentives in parts of the purpose-built rental market compared with the unusually tight conditions of earlier post-pandemic years.

Why did Toronto's rental market soften while new condo construction was falling?

Many of the units reaching completion in 2025 had been started years earlier during a much stronger development cycle. That created a large wave of new inventory even as current construction starts were falling sharply. The rental market was therefore absorbing earlier supply rather than responding to a new construction boom.

Should landlords automatically lower rent to retain a tenant?

No. The decision depends on the tenant's current rent, achievable market rent, tenant history, expected vacancy, turnover costs, and the property's condition. In a softer market, however, even a modest concession can sometimes cost less than replacing a reliable tenant and carrying a vacancy.

What should landlords review before pricing a Toronto rental?

Review recent comparable leases, current competing listings, days on market, available incentives, property condition, seasonality, and the specific neighbourhood or building. Asking rents alone do not show what tenants are actually agreeing to pay.