Rents are falling in Toronto, and vacancy is back at 3 per cent
The first genuinely tenant-favourable market since the pandemic, driven by a wave of purpose-built rental completions and condominium investors who cannot sell.
CMHC reports rental markets easing across the country through 2026, with new supply — particularly purpose-built rental — lifting vacancy rates and slowing rent growth. The effect is sharper in the largest markets: Toronto’s vacancy rate reached 3.0 per cent for the first time since the pandemic.
Asking rents are declining rather than merely growing more slowly, and the softening in Toronto has been broad — across neighbourhoods, and across furnished and unfurnished units alike. Nationally, average condominium apartment rents were down about 5.7 per cent year over year as of January 2026.
Where the supply came from
Two sources at once. Purpose-built rental construction ran at nearly twice its ten-year average in 2025, with Toronto posting its second-highest level of rental starts on record. And the condominium completions that arrived into a market with no investor buyers went to the rental pool instead, because a unit that cannot be sold at an acceptable price is rented.
How long it lasts
CMHC expects rental construction to ease gradually from that 2025 peak, with housing starts slowing through 2026 and falling more sharply in 2027 and 2028. The current conditions are the product of a building wave that has now passed its crest, which is a reason to treat today’s rents as a moment rather than a trend.
Sources
Figures are as reported by the sources above on the date of publication. Nothing here is advice about a particular property or a particular household — for that, ask someone who can see your circumstances.