I’ve spent the past week speaking with Toronto landlords who are doing something that would have seemed unthinkable just two years ago – offering incentives to attract tenants. The rental landscape in our city is showing subtle but significant signs of transformation, particularly in the downtown core where competition for qualified renters has intensified.
“We started offering one month free on 12-month leases back in February,” says Mira Patel, who manages three mid-rise buildings near Liberty Village. “It’s not something we ever had to consider before, but the market has definitely shifted.”
This change follows a period of unprecedented rental growth that saw average one-bedroom apartments in Toronto reach nearly $2,500 monthly. According to the Toronto Regional Real Estate Board’s latest report, rental listings have increased by 17% compared to this time last year, while actual lease transactions have only grown by 4%.
The math isn’t complicated – more available units with fewer people signing leases means landlords must work harder to attract tenants.
Walking through CityPlace last weekend, I noticed something I hadn’t seen in years – “Now Leasing” signs with visible mentions of move-in incentives. From free parking to reduced security deposits, property managers are getting creative.
Daniel Wong, an economist with the Canada Mortgage and Housing Corporation, explains that we’re experiencing a market correction rather than a collapse. “Toronto’s vacancy rate has increased from about 1% to around 3.5% in certain neighborhoods. That’s actually closer to what housing economists consider a healthy balance,” he told me during our conversation at a downtown café.
The shift appears most pronounced in newer purpose-built rental buildings and condo investor units. Older rental stock and buildings with below-market rents continue to maintain near-zero vacancy rates.
Several factors are driving this change. First, the post-pandemic construction boom has resulted in thousands of new units hitting the market simultaneously. Second, higher interest rates have pushed some potential homebuyers to remain renters longer, but have also forced others to find roommates or move back with family to manage costs.
“We’ve definitely seen a slowdown in the number of qualified applicants compared to 2022,” says Trevor McKenzie, who owns several rental properties in the east end. “Back then, we’d have 30 people showing up to viewings and multiple offers over asking. Now we might get five or six interested parties, and they’re negotiating.”
This doesn’t mean Toronto has suddenly become affordable. Average rents remain significantly higher than pre-pandemic levels, with typical one-bedroom units still around $2,300 monthly. However, the days of bidding wars and sight-unseen rentals appear to be waning.
For renters, this represents the first glimmer of negotiating power they’ve had in years. Megan Chen, who recently moved from a basement apartment to a condo in North York, told me she was surprised by the experience.
“The property manager actually called me back after I viewed the place and offered to include utilities if I signed that week,” Chen said. “That would never have happened when I was looking in 2021.”
Real estate analyst Sophia Rivera with Urban Solutions points out that this trend varies dramatically by neighborhood. “The downtown core, especially areas with high concentrations of similar units like Liberty Village or CityPlace, are seeing the most significant incentives. Move further into neighborhoods with fewer purpose-built rentals, and landlords still have the upper hand.”
The City of Toronto’s housing secretariat reports that approximately 15,000 new rental units are expected to enter the market by the end of 2024, which could further tilt the balance toward renters.
For those currently apartment hunting, Rivera suggests using these market conditions to your advantage. “Don’t be afraid to ask for concessions, especially if you have strong credit and references. The first offer isn’t necessarily the final one anymore.”
I spoke with several renters who successfully negotiated lower monthly rates or secured incentives by simply asking. Jamie Kowalski, who recently signed a lease in Leslieville, managed to get $150 off the monthly asking price after pointing out several comparable units in the area.
“I think landlords are realizing that good, stable tenants are valuable, especially with the uncertainty in the market,” Kowalski said.
City housing advocates caution that this correction, while welcome, doesn’t address Toronto’s fundamental affordability crisis. The average one-bedroom apartment still requires an annual income of approximately $92,000 to meet the standard affordability threshold of 30% of income.
As summer approaches – traditionally the busiest rental season in Toronto – it remains to be seen whether these incentives will continue or if the market will tighten again. For now, though, renters have a rare opportunity to leverage slightly more favorable conditions.
If you’re in the market for a new apartment, take your time, do your research, and don’t be afraid to negotiate. After years of feeling powerless in Toronto’s rental market, tenants finally have a bit more say in the conversation.
