Toronto Rental Market Report – Fall 2025 Insights

Estimated reading time: 8 minutes

Toronto’s rental market is softening compared with the post-pandemic peak. Real estate board data show that average condo apartment rents have eased and days on market have increased. Freehold rentals — including detached, semi-detached, and row houses — remain more affordable but are also taking longer to lease.

Landlords now face greater competition for tenants and must adapt pricing and retention strategies to avoid costly vacancies.

Market Cooling: Toronto Rental Trends in Fall 2025

A Record Wave of Completions — Not a New Construction Boom

Four to five years ago, Toronto’s housing market was red hot. Interest rates were low, immigration was high, and developers launched a surge of high-rise condo projects designed for investors who planned to close on units and either resell or rent them for profit.

Those projects are now finishing — and landing in a much softer market. According to Urbanation’s Q1-2025 Condominium Market Survey, GTHA condo completions reached 9,495 units in the first quarter alone — 67% above the 10-year average — and full-year 2025 completions were projected at 31,396 units, a new record surpassing 2024’s previous high.

The important nuance: this is a wave of completions, not new construction starts. Over the same period, only 497 new condo units broke ground in the GTHA in Q1-2025 — an 88% drop below the 10-year average and the lowest quarterly total since 1996. Units currently under construction actually fell, from a record 105,864 in Q2-2023 to 69,042 by Q1-2025 and 64,623 by Q2-2025 — a decline of roughly a third in two years. In short: the last boom is finishing exactly as demand cools, while very little new supply is being started to replace it once this wave clears.

Toronto Still Leads North America in Cranes — For Now

Despite the pullback in new starts, Toronto’s skyline still shows the legacy of that earlier boom. The RLB Crane Index for Q1-2025 counted 106 active tower cranes in Toronto’s downtown core — more than double its closest North American competitor (Los Angeles, at 42) — with residential projects accounting for the majority.

That count reflects projects already underway, not new activity. With condo starts near multi-decade lows and a record 23,918 units of unsold new inventory as of Q1-2025 (up 6% year-over-year and 58% above the 10-year average), fewer cranes are likely to go up to replace the ones coming down over the next few years — one reason some analysts expect today’s softness to give way to renewed tightness later in the decade.

Population Growth Has Moderated

Toronto is no longer seeing the record immigration levels of 2021–2023. Canada admitted 104,256 permanent residents in Q1 2025 — the smallest first-quarter total since 2021 — while Statistics Canada’s own Q1 2025 population estimates recorded a real decline in non-permanent residents across Ontario, driven largely by a drop in study-permit holders. Fewer newcomers mean fewer immediate rental seekers, softening competition for units.

Incentives Are Back as Competition Rises

To fill units, landlords — especially in new or high-end buildings — are offering incentives such as free months of rent, waived deposits, or parking discounts. Per Urbanation’s Q2-2025 rental survey, 65% of purpose-built rental buildings completed since 2000 were offering incentives to renters — up sharply from 36% just a year earlier. These concessions are pulling advertised rents lower and shaping tenant expectations.

In summary, a combination of record completions from the last construction cycle, sharply reduced new construction starts, slower population growth, and the return of tenant incentives has shifted Toronto’s rental market from the rapid growth of the early 2020s to a more competitive, tenant-friendly phase. These conditions set the stage for the rental pricing and leasing trends that follow.

Condo Apartment Leasing Trends

Between January 1st and August 31st, 2025, one-bedroom condo apartments in Toronto leased for an average of $2,259 per month, per The Habistat’s market data. The median lease price was $2,200, with most deals falling between $2,100 (25th percentile) and $2,350 (75th percentile). Roughly 11,162 one-bedroom condo leases were recorded during this period.

• The average days on market (DOM) was 24, with a median of 16 — some units rented quickly, but many lingered when priced above market.
• Only 9.7% of one-bedroom condos leased above the list price, a sharp contrast to the bidding wars seen in 2022–2023.
• Nearly 80% of one-bedroom leases closed between $2,000 and $2,499.

For two-bedroom condo apartments, the average lease price was $2,793, with a median of $2,650. More than 8,500 leases occurred between $2,500 and $2,999, and another 5,700 between $2,000 and $2,499.

• Transaction volume for two-bedroom condos reached 19,820 leases.
• Average DOM was 24 (median 17), slightly slower than the rapid pace of the previous two years.
• Only 10.1% of two-bedroom condos leased above list price, further confirming softer competition.

Overall, the condo market shows moderating rents and slower lease-up times compared with the rapid growth of 2021–2023.

Freehold Rental Trends (Detached, Semi-Detached, Row Houses)

Freehold rentals — a smaller but important segment of Toronto’s rental pool — also reflect a more tenant-friendly environment.

For one-bedroom freehold rentals, the average rent was $1,788, with a median of $1,750. Units stayed on the market for an average of 34 days (median 24), noticeably longer than comparable condos. Only 13.5% of leases closed above the list price, signalling reduced competition. Most transactions were priced between $1,500 and $1,999.

For two-bedroom freeholds, the average lease price was $2,516 (median $2,400). Most activity occurred between $2,000–$2,499 and $2,500–$2,999.

• Average DOM was 32, with a median of 22 — slightly slower than condos.
• Just 15% of two-bedroom freeholds leased above asking, reinforcing that tenants now hold more negotiating power.

Active Listings Snapshot: Fall Rental Market

Rental Price Watch: Toronto, Fall 2025 — Supply Continues to Build (Jan 1 – Aug 31, 2025)

• One-bedroom condos: 1,270 active listings with an average list price of $2,342 (median $2,300).
• Two-bedroom condos: 2,484 active listings averaging $2,950 (median $2,750).
• Average days on market for condos hover at 26, with a median of 17–19, showing slower absorption when units are overpriced.

For freeholds, one-bedroom listings average $1,674 (median $1,700) with 41 average / 31 median DOM. Two-bedroom freeholds list for about $2,369 (median $2,200) and remain on market 38 average / 30 median days.

This data reinforces that tenants now have more choice, especially in the condo sector where inventory is highest.

Implications for Landlords

The current environment changes how rental properties should be managed. Retention is now more cost-effective than turnover. Vacancies can take weeks to fill and often require concessions that erode profit. Renewing a reliable tenant — even with a modest rent decrease or small improvement such as painting or upgrading appliances — is typically cheaper than losing several months of rent from vacancy loss, turnover costs and repairs, and locator fees.

Pricing decisions must be data-driven and neighbourhood-specific. Using last year’s peak rents can lead to extended marketing periods and eventual reductions. Reviewing comparable listings and monitoring incentives helps position a property competitively from the start.

The living experience is another retention tool. Fast maintenance response, proactive seasonal checks, and small updates to common areas or in-unit features can convince tenants to stay. Communication also matters: tenants who receive clear, early renewal offers and fair explanations for rent changes are far less likely to move.

Compliance with Ontario’s rental regulations is critical. Most properties built before November 2018 remain under the province’s annual rent increase guideline, and proper notice must be served to avoid disputes at the Landlord and Tenant Board. In a softer market, tenants are more likely to challenge improper increases or unclear communication.

We are now set firmly in a tenant’s market where they have many options to choose from and where higher finishes do not command the same price increases as they used to. If you are not competitive in both price and desirability, you will sit on the market and eventually reduce to secure a tenant — often to a price lower than the original listing.

Key Takeaways for Landlords in Toronto’s 2025 Fall Market

• Pricing power has shifted: most leases now close at or below asking; only 10–15% achieve above list. Overpricing leads to longer DOM and price reductions.
• Price right from the start: ensure your unit is priced competitively against what has actually leased, not last year’s peak.
• Good tenants are increasingly rare: if a good tenant applies, respond quickly to secure them rather than waiting for “someone better.”
• Vacancy risk is rising: average time to lease is three to five weeks, and even longer for freehold rentals.
• Retention is crucial: keeping reliable tenants with small rent decreases or upgrades is more profitable than marketing a vacant unit.
• Segment strategy matters: downtown condos face the fiercest competition; freeholds have less supply but slower lease-up if priced too high.
• Quality and responsiveness count: well-maintained, updated units with attentive management still rent faster.

Bottom Line: Toronto Rent Trends Fall 2025

Toronto’s rental market in late 2025 is no longer overheated. Rents are softening, units take longer to lease, and incentives have returned — driven less by a fresh building boom than by a wave of already-planned units finally completing just as new construction starts collapse. Landlords who adjust expectations, keep tenants satisfied, and manage renewals strategically will maintain more stable returns and be better positioned when construction starts — and demand — pick back up.

“The last boom is finishing exactly as demand cools — and very little new supply is being started to replace it once this wave clears.”

Need expert support? LandLord’s 30 years of experience in Toronto property management can help you navigate pricing, compliance, marketing, and tenant retention so your investments stay profitable — even in a changing market. Contact us today to discuss your rental strategy.

Frequently Asked Questions

Sources: Urbanation Q1-2025 Condominium Market Survey; Urbanation Q2-2025 Rental Market Survey; RLB Crane Index, Q1-2025; Statistics Canada, Population Estimates Q1-2025; The Habistat lease and listing data, January–August 2025.