Toronto Rent Becomes More Affordable with 4% Decrease

Toronto Rent Is Finally Easing: What a 4% Drop Means for Renters and Owners

For the first time in a while, renters in Toronto are getting a bit of breathing room.

According to the latest data from Statistics Canada, average asking rents in Toronto continued to trend downward in the third quarter of 2025. This marks a noticeable shift after several years of relentless rent increases—and it’s something both tenants and property owners should be paying close attention to.

Toronto Two-Bedroom Rents Are Down Nearly 4%

In Q3 2025, the average asking price for a two-bedroom apartment in Toronto fell to $2,720 per month, representing a 3.9% decrease compared to the same time last year.

To put this into perspective:

• Toronto rents peaked in late 2023 at an average of $2,920 per month for a two-bedroom

• Since then, prices have gradually declined quarter after quarter

While $2,720 is still far from “cheap,” this decline signals a meaningful change in market momentum.

Why Are Rents Coming Down?

There isn’t just one reason—this shift is being driven by several overlapping factors.

1. More Rental Inventory on the Market

Statistics Canada points to an increase in rental supply. More units available means landlords are competing harder for tenants, which naturally puts downward pressure on asking prices.

2. A Weaker Resale Market

The Toronto-area resale market has been sluggish since 2022. As a result, some homeowners and investors who might have sold are instead choosing to rent out their properties, increasing rental availability.

3. Fewer Non-Permanent Residents

Ontario saw a decline in non-permanent residents during the first half of 2025. With less demand from international students, temporary workers, and newcomers, the rental market is no longer as tight as it once was.

Renters Are Starting to Negotiate Again

One of the most interesting shifts I’m seeing on the ground is this: tenants are negotiating.

In a market where rents were climbing nonstop, renters had little leverage. Now, with more options and softer demand, some tenants are successfully negotiating:

• Lower renewal rates

• Rent reductions

• Better lease terms

This doesn’t mean every landlord will agree—but the power balance is no longer one-sided.

Toronto Isn’t Alone: Other Canadian Cities Are Seeing Drops Too

Toronto’s rental slowdown is part of a broader trend across major Canadian cities.

In Q3 2025:

• Vancouver two-bedroom rents averaged $3,190, down 6% year-over-year

• Montreal averaged $1,930, a 1% decline

While each market is different, the pattern is consistent: rental prices are softening after years of rapid growth.

What This Means Going Forward

For renters, this is a moment to stay informed, shop around, and negotiate. For property owners and investors, it’s a reminder that pricing strategy matters more than ever in a changing market.

As always, real estate moves in cycles—and understanding those cycles is how you make smarter decisions, whether you’re renting, investing, or planning your next move.

If you want to talk about what this shift means for your specific situation, I’m always happy to help.

— Maria