Rents dropping in Toronto, giving tenants more negotiating power, experts say

If you're looking for a rental in Toronto or even an upgrade to a bigger space  — now's not a bad time to shop around.

The average price for apartments and condos has been trending down for over a year and as a result of the slow market, landlords are offering incentives to entice renters, such as one month of free rent.

"What really stands out to us is that the rental market has lost its sense of urgency," said Matisse Yiu, marketing manager of Liv Rent.

"We're no longer seeing people scramble to secure a unit within the first few hours of it being listed," she said.

According to Liv Rent's April market report, the average cost of a one bedroom apartment downtown Toronto is $2,224 — nearly $400 dollars less than the last rent peak in October 2023, when the average price was $2,600.

Real estate experts say some of the factors include high supply in the condo market, less demand from international students with new limits on study permits and an uncertain job market.

Yiu notes that people have also been moving back in with family or getting roommates to save money, and that there is a pattern of people leaving downtown Toronto for more affordable options.

"What's interesting is that within the GTA we saw the numbers drop, but outside the GTA we saw a slight increase in rent prices," Yiu said, using Niagara Falls as an example as a place where rents have consistently been rising.

Realtors predict the favourable market for renters is temporary in Toronto but could continue through the spring. 

Desmond Brown, a real estate agent at RE/MAX Hallmark Realty Ltd., says often as the weather heats up, so does the competition. In this type of market, a common move is tenants upgrading their space.

"We'll be seeing more activity and people moving into units that are a little bit bigger for the same price," Brown said.

Brown recommends that even during a slower market, tenants should still be prepared with their rental application, references, proof of employment and a credit score.