Rents falling as new condo units flood Toronto market
A surge of newly completed apartments is driving asking rents lower across Toronto, though landlords are still raising rents on occupied units.
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Asking rents in Toronto are falling as an influx of newly completed condo apartments competes for tenants, according to Canada Mortgage and Housing Corp.'s mid-year rental market report.
Many of those new units couldn't be absorbed in the ownership market and are now being rented out instead. The result is a short-term imbalance between supply and demand in new, higher-priced units, leading to rising vacancies that can take months to fill.
Landlords are increasingly turning to incentives to attract tenants—advertising multiple months of waived rental fees, free or discounted parking, gift cards, move-in credits, or cash bonuses. However, they continue to raise rents on occupied units and when units turn over in markets with persistently low turnover, contributing to higher average rents paid by all tenants.
The drop in asking rents is particularly visible in Toronto, Vancouver, Calgary, and Ottawa. For renters shopping around, the current market offers more negotiating power than it has in years. For those already locked into a lease, expect increases when renewal time comes.