More and more desperate Toronto landlords offering free rent in market downturn

If you think being a landlord in Toronto is smooth financial sailing, you can think again. Amid all of the other troubles faced by those offering rental supply in the city lately, a bombing real estate market is now pushing rent prices too low for some to float their properties, while unusually weak demand leaves nary a tenant to be found.

The average price of rent in the city and across Ontario has been creeping down for months now amid plummeting real estate sales — especially for condos — and an economic recession.

While renters looking for a new place can breathe a sigh of relief at lower rates and more selection, some small landlords are exiting the biz altogether (if and when they can), while the larger ones are matching the present landscape with more incentives (which they, unlike the little guys, can afford).

Per the latest rental report from Urbanation, which just dropped this week, some 65 per cent of apartment buildings in the GTHA are now offering perks ranging from multiple months of free rent to complimentary cable packages and other gifts with the signing of a lease.

This proportion is a huge leap from last year, when only 36 per cent of purpose-built rental projects were resorting to such marketing tactics. 

Yet still, vacancy rates have crept up by 0.8 per cent year-over-year.

Vacancy rates across the Toronto area over the last few years, courtesy of Urbanation.

As for condos, vacancy rates are dropping there, too: although there were 10 per cent more tenancy agreements signed in Q2 of this year compared to the same time in 2024, at the same time, 13 per cent more units have come up for rent, pushing monthly rates for this housing type down by 4.5 per cent.

As the firm writes, "the decrease in rents over the past year reflects increased competitive pressures and population growth slowing from the 2022-2024 boom."

But, the experts add that they don't expect the trend to last much longer, adding that "while supply will remain high for the rest of the year, a drop in condo completions starting next year and a lack of growth in rental construction starts should soon lead to higher rents."