For the first time in years, Toronto’s rental market is no longer climbing by default.
By late 2025, asking rents across the city began to ease - not collapse, not spike - but reset. And that distinction matters.
What the Numbers Are Telling Us
Average asking rent for a two-bedroom apartment in Toronto is now around $2,720, down almost 4% from last year and well below the late-2023 peak near $2,920.
That may not sound dramatic, but in a city where rents felt untouchable for years, it’s a meaningful shift. Toronto is the market that usually resists gravity the longest - so when it moves, something underneath has changed.
Why Toronto, and Why Now?
This isn’t random. Two things finally lined up.
Demand slowed.
Toronto absorbed renters for years at record speed, driven largely by international students and temporary residents. In 2025, that pipeline thinned. Fewer new renters entered the market, and units stopped disappearing overnight.
Supply showed up.
Thousands of new condos and purpose-built rentals were completed across the GTA. At the same time, resale activity stayed weak. Many condo owners who once planned to sell chose to lease instead, adding even more inventory to the rental pool.
More listings. Fewer renters. That math always leads to one outcome.
Landlords Are Competing Again
This is the real change people miss.
Toronto’s rent decline isn’t driven by distress - it’s driven by competition. Units are sitting longer. Tenants are comparing options. Pricing aggressively now means chasing the market down instead of leasing efficiently.
For the first time in a while, landlords need strategy, not optimism.
Even Room Rentals Are Softening
The pressure isn’t limited to full units. Room rentals - often tied to student demand - have also eased in parts of the city. That’s usually the first segment to react when population growth slows, and it confirms what the broader data is already showing.
What This Means on the Ground
Renters have leverage again: more choice, more negotiating power, fewer panic decisions.
Landlords need realistic pricing and strong presentation - overreaching costs time.
Investors should reassess cash-flow assumptions built on nonstop rent growth.
Leasing agents are back to doing real market work, not just uploading listings.
The Bottom Line
Toronto’s rental market isn’t breaking.
It’s normalizing.
After years where demand alone set the price, supply is finally part of the conversation again. From here on, outcomes will depend on location, product quality, and pricing discipline - not hype.
And honestly?
That’s a healthier market for everyone.
