A Market in Flux Amid a Shifting National Landscape

As we enter spring 2025, Toronto’s condominium rental market is feeling the weight of economic pressures, oversupply, and shifting renter preferences. According to the latest data from the Rentals.ca and Urbanation April 2025 Rent Report, average condo rents in Canada’s most competitive rental market — the GTA — are facing downward pressure, even as the broader national market begins to show subtle signs of recovery.

Condo Rents in the GTA: Flat Growth, Uneven Performance

While purpose-built rentals across Canada have surged in average asking rent over the past five years (+35.5%), condominium rentals in the GTA tell a different story. The average rent for a condo in March 2025 is $2,232, down 3.8% year-over-year, and just 0.6% higher than it was five years ago. In other words, Toronto condo rents have barely budged since the early days of the pandemic.

This stagnation is notable when compared to strong long-term rental growth in larger units, especially in the purpose-built sector. For example, three-bedroom purpose-built units saw a 39.6% increase since 2020, while similar condo units grew a modest 1.0% over the past year to $2,850.

The drop in demand for smaller units has been especially sharp:

• Two-bedrooms: Down 4.3% year-over-year to $2,374
• One-bedrooms: Down 3.7% to $2,032
• Studios: Down 1.4% to $1,826

Why Are Toronto Condo Rents Softening?

Several factors are shaping the current downturn in condo rents:

Elevated supply: A record number of condo completions has flooded the market, increasing competition among landlords.

Seasonal slowdown recovery: While March saw the first national monthly rent increase since September 2024 (+1.5%), winter leasing lulls earlier this year weighed heavily on Toronto rents.

Affordability challenges: Despite a modest improvement in affordability, renters continue to migrate to more cost-effective markets, including purpose-built units and nearby suburbs.

Shift toward purpose-built rentals: Renters seeking long-term security and newer amenities are increasingly choosing purpose-built rental buildings over condos.

Toronto’s Ranking Among Major Markets

Toronto remains one of the most expensive markets in the country, but it’s seeing some of the steepest rent declines:

Overall, Toronto apartment rents fell 6.9% year-over-year, reaching a 32-month low of $2,589.

Two-bedroom apartments in Toronto dropped 9.3%, now averaging $2,966, signaling waning demand or price sensitivity in this segment.

Compared to other large urban centres, this continued contraction places Toronto among the cities with the slowest five-year rental growth in the purpose-built sector (+12.1%), and the most prolonged rent declines nationally (14 consecutive months).

Where Are Tenants Headed?

Renter activity is shifting. As affordability becomes more pressing, interest is migrating toward:

Outer GTA markets like Oakville, Niagara Falls, and Sudbury, which saw strong rent growth.

Purpose-built units offering better amenities and pricing.

Shared accommodations, which, despite an 8% decline in average rents in Toronto (to $1,166), remain a viable option for affordability seekers.

What’s Next for GTA Condo Rentals?

As we head into the summer leasing season, landlords and investors in the GTA condo market will be watching key indicators closely:

Will increased immigration and seasonal demand reinvigorate condo rents?

Could interest rate decisions and affordability initiatives bring back momentum to the condo segment?

Will landlords begin offering incentives to differentiate their listings in a saturated market?

One thing is clear: the GTA condo market is at a crossroads. For renters, there are more options than ever, and for owners, understanding pricing dynamics is crucial to staying competitive.

Final Takeaway

Toronto’s condo rental market is cooling — but not frozen. The next few months will be pivotal. Whether you’re an investor, a renter, or a real estate professional, staying informed about these micro-trends will help you make smarter moves in 2025.