Toronto Condo Rents Just Fell: What the Latest GTA Data Really Says

Good news for renters in Toronto. Official numbers show the average condo rent across the GTA, the Greater Toronto Area, has come down. Compare the third quarter of 2023 with the first quarter of 2024 and you see a drop of roughly 7%. I'm Moe Asgarian, a senior real estate broker in Toronto and ranked #47 at RE/MAX worldwide. Let me walk you through what this data actually means, because the headline number hides a more interesting story underneath.

The figures come from Urbanation, a firm that has been collecting this information for 15 years. In that entire window, this is the biggest rent decline they have recorded under normal conditions. We saw a bigger drop during COVID, from late 2020 into early 2021, but setting that aside, this is unprecedented, and Canadian media and market experts have taken notice.

The Number Behind the Headline

Here is the part that gets lost. Even with this drop, average rent across the GTA and Hamilton is still up 1.6% year over year when you compare the first quarter of 2023 to the first quarter of 2024. That 1.6% is a very small increase by recent standards. From 2022 to 2023, average rent grew 13%. Over two years, average rent is up about 15%. So yes, rents are higher than they were, but thanks to the number of projects entering the GTA, the pace has almost stalled while the market waits to see where this goes.

How New Condos Are Cooling Prices

The report shows the effect of new condo projects hitting the market. Over the past 12 months, 23,000 new condo units were registered, a 21% jump over the year before. On average, a condo project takes about 5 years to build. As interest rates climbed over the past few years, investment in this market fell, and that means fewer new condos down the road. More supply now is pressing on rents, and that is a big part of why prices softened.

Why the Relief May Not Last

The report is careful to say the market stays quiet through the end of 2024, without a flood of new condos. In the first quarter of 2024, 12,000 condos were completed, and Urbanation expects roughly 13,000 more by year end. Read that closely: about the same volume that arrived in three months is expected to trickle in over nine. Supply is slowing. With supply cooling and demand still strong, the report does not expect rent drops to continue through the end of the year. As soon as new condos arrive, rents get controlled or fall; as soon as construction slows and inventory thins, rents push back up.

The Longer View, and What We Do

Looking further out, the report says 10,700 condo units are set to reach the GTA market by 2028, and it expects rent increases to keep going. Meanwhile, in the city of Toronto, 11,600 condo units have been delayed since mid-2022, driven by high interest rates and investor hesitation. Rent, like any market, runs on supply and demand, and a thin pipeline a few years out could send rents to much higher numbers. On my team we watch the rental market as closely as we watch buying and selling, and many of our clients are landlords deciding how to position a unit. If you are thinking about renting a home or renting one out in Toronto, fill out the form below or book a free consultation with me and my team. Stay well and take care.