Toronto and GTA Rents Fall to 2-Year Lows: What the Drop to $2,060 Means for Landlords and Tenants

Toronto and GTA Rents Fall to 2-Year Lows: What It Means for the 2026 Rental Market

For the first time in more than two years, average asking rents across Canada have dropped to just over $2,000.

According to the latest report from Rentals.ca and Urbanation, average asking rents fell 2.3% year-over-year in December to $2,060, marking 15 consecutive months of rental declines.

That’s the lowest level in 30 months.

And for landlords and tenants in the Toronto real estate market and broader GTA rental market, this is significant.

Toronto and Vancouver Lead the Declines

Among Canada’s largest cities, the steepest annual rent drops were seen in:

• Vancouver — down 7.9% to $2,654
• Toronto — down 5.1% to $2,498

Both cities saw rents fall to their lowest levels since early 2022.

That’s a major shift after the aggressive rent growth we saw between 2022 and 2024.

What’s Causing GTA Rents to Drop?

According to Urbanation president Shaun Hildebrand, several factors have reversed the rental surge:

1. Record-high apartment completions

2. Slowing population growth

3. Economic uncertainty

4. Ongoing affordability challenges

In simple terms: supply increased while demand pressure softened.

Across Ontario, average apartment rents declined 3.2% year-over-year to $2,257.

In Alberta and Quebec, rents also fell. Meanwhile, Saskatchewan, Nova Scotia, and Manitoba saw modest increases.

But the real focus for many investors is what’s happening in the GTA.

Mississauga and GTA Rental Market Impact

While this report highlights national trends, the implications for Mississauga real estate and GTA investors are important.

When rents fall:

• Cash flow margins tighten
• Investor returns compress
• Tenants gain more negotiating power
• Vacancy periods may increase

We’re also seeing stronger competition among condo landlords — especially in buildings that saw a wave of investor closings over the past 24 months.

Condo apartments nationally fell 4% year-over-year to $2,131, while house and townhouse rentals declined 5% to $2,071.

Purpose-built apartments were more stable, dipping just 1% to $2,049.

That tells us something important: the secondary condo rental market is feeling more pressure than purpose-built rentals.

Are Rents Actually “Low”?

Here’s where context matters.

While rents are down:

• They are 5.4% lower than two years ago
• But still 14.1% higher than pre-pandemic levels (December 2019)

So although we’re seeing declines, rents are not historically cheap.

This is more of a normalization after an unusually aggressive spike.

What This Means for GTA Landlords

If you own investment property in Toronto or Mississauga, this is a strategy moment.

1. Pricing correctly is critical.
   Overpricing in a softer rental market leads to longer vacancies.

2. Presentation matters more.
   Professional photos, staging, and clean units help attract quality tenants faster.

3. Tenant screening is still key.
   In a shifting market, protecting long-term stability matters more than squeezing for top-dollar rent.

If rents continue trending downward in the near term — as Urbanation suggests — investors may need to adjust expectations for 2026.

What This Means for Tenants

For renters in the GTA, this is welcome news.

More supply and slower demand means:

• More choice
• Better negotiation leverage
• Possible incentives from landlords
• Less bidding pressure

If you’ve been waiting to move or upgrade within Toronto or Mississauga, this may be the most flexible rental environment we’ve seen in two years.

What Happens Next in the GTA Rental Market?

The big question is whether this is temporary — or the start of a longer cooling cycle.

Here’s what to watch:

• Condo construction slowdowns (which could tighten supply in future years)
• Immigration and population growth trends
• Interest rate movements
• Overall GTA housing market activity

If condo development continues slowing — which it has — rental supply could shrink in future years, eventually pushing rents upward again.

Real estate moves in cycles.

Right now, the rental market is correcting after an overheated period.

Final Thoughts

The GTA rental market is not crashing — it’s stabilizing.

Average asking rents at $2,060 nationally — and $2,498 in Toronto — reflect a market adjusting to new economic realities.

For landlords, this is a time to focus on strategy, tenant quality, and long-term positioning.

For tenants, this is a window of opportunity.

If you own rental property in Mississauga or the GTA and want to review your rental strategy, or if you’re considering investing in today’s shifting market, let’s look at the numbers together.

In this market, smart decisions matter more than ever.