Looks like rental prices in Ontario are starting to drop in urban areas, according to a recent housing report.
said in a July 8 report that average asking rents for many one- and two-bedroom apartments were down year-over-year in four of seven markets.
“Rents have been coming down across the province, but some municipalities are seeing a higher drop than others,†Toronto-based mortgage and real estate expert Victor Tran told Metroland Media.
Looking at Toronto, an average 10 per cent drop was seen.
“It’s definitely a trend that we’re seeing, and everyone is keeping a close eye on it. I think it will continue, especially in major urban centres like Toronto or even Vancouver.â€
Supply versus demand
Tran said the reason behind the price drop in urban centres is because of the condo market.
“There’s an overabundance of supply, especially in the condo market. There’s a lot more inventory or selection out there for tenants,†he said, adding it’s actually good news for renters.
The Doug Ford government announced its  June 30 for the upcoming year, at 2.1 per cent. The cap is how much a landlord can raise a current tenant’s rent during the year. This time, it’s tied to inflation, and is lower than the 2.5 per cent allowed for 2025.
“Our government knows tariffs and economic uncertainty are creating challenges for many people in Ontario, including renters, which is why we are capping rent increases for 2026 at 2.1 per cent,†Minister of Municipal Affairs and Housing Rob Flack said in a news release. “This cap is the lowest in four years, which demonstrates our commitment to protecting tenants across our province as we continue searching for ways to keep costs down across the province.â€
That rental increase is another good sign for renters, which equals some potential savings in the coming year.
“It is often cheaper to rent in certain areas, and a lot of first-time homebuyers who are considering buying are realizing how expensive it is to own a home,†Tran said. “They are almost giving up on that home ownership dream, now that rents are coming down.â€
Other markets that also saw a rental decrease included Barrie with a three per cent drop year-over-year, and Oshawa with a six per cent drop.
But not every municipality felt a reprieve from high rental rates. Niagara Falls rental prices increased by 6 per cent, and neighbouring St. Catharines saw prices rise by two per cent.
“I don’t understand why that is, but it usually boils down to supply versus demand,†Tran said.
Renters negotiate better deals
As the price of renting drops in some areas, it doesn’t mean your current landlord will be dropping your rates.
So a tenant is left with a few options, Tran said.
One is to stay and keep saving money to purchase a home later on.
“Or, if they’re really unhappy with their current living arrangement, they can find a new lease,†he said. “There’s an abundance of supply out there.â€
But moving takes a lot of time and labour.
There’s still another option on the table.
“I have a number of clients who are considered first-time homebuyers currently renting, who aren’t happy with their current rent. They managed to negotiate with their current landlord in reducing the rent.
“From the landlord’s perspective, it’s unfortunate they have to take a bigger loss, but they hang onto a tenant who’s reliable and been with them for a certain amount of time, instead of vacating the unit and having to relist it. It’s always a gamble with landlords finding a tenant that is suitable and won’t squat.â€
Investment property costs
For those considering becoming a landlord in this market, it’s best to work with experts in the field to find the best solution — both for property and financial purposes, Tran noted.
“Most people think if they were to buy an investment property, they will easily qualify based on their income. They think about the rental income they’d bring in and think the lenders will give you the loan based on 100 per cent of the rental income.â€
But lenders are risk-averse, and any day that goes by without a tenant in the home means you may be closer to not being able to pay back your loan, Tran said, and lenders want to make sure you can afford your monthly payments even if your property is vacant.
Getting your first rental space
When asked for tips for a new tenant, Tran advises people check out their landlord — in the same way a landlord checks your credentials.
“I recommend a tenant dig deeper, talk to the leasing agent to find out what the situation is — why is the landlord renting the home? And what are their long-term and short-term goals,†he said. “Once people settle into a home, especially with kids in school, it’s a huge pain to have to move.â€
The worst-case scenario would be if a landlord doesn’t get enough rental income, they may be forced to sell the property, leaving you homeless.
“There’s so much supply out there, (tenants) have time to choose and do their due diligence.â€
Another tip is for tenants to understand their rights, and read through the .
“I find tenants feel powerless, and they feel they need to abide by all the rules the landlord creates — like no pets. The landlord and tenant board doesn’t allow that, they can have a pet. There are rules around it, but the point is for tenants to understand their rights.â€
Tenants, in general, are better knowing at their rights than decades ago, thanks to Google and Chat GPT, Tran added.
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