Most coverage of the July rent numbers led with the national figure: asking rents down 4.0% from a year earlier, the 22nd straight month of annual declines. That is accurate, but for anyone tracking Toronto it buries the more interesting number in the release.
According to the latest National Rent Report from Rentals.ca and Urbanation, Toronto's average asking rent rose 1.6% from June to $2,577. That was the city's fourth monthly gain in a row and left rents only 0.6% below July 2025, the smallest annual decline among Canada's six largest markets. More telling still, the number of Toronto listings was down roughly 6% from a year earlier.[1]
Rents tell you what landlords are asking. Listings tell you how much choice tenants have. When the second number starts shrinking, the first one usually follows.
Why inventory tends to move first
Over the past two years, Toronto's rental softness came from supply as much as from demand. Record condo completions, a wave of new purpose-built towers and slower population growth all landed in the same window. Landlords competed for tenants with free months and lower asking rents, and vacancy rose. CMHC's 2025 Rental Market Survey put Toronto's purpose-built vacancy rate at 3.0%, well above the very tight levels of the early 2020s.[2]
A drop in active listings is the first sign that this pressure is easing. It can happen for a few reasons:
- New supply is being absorbed faster than it arrives.
- Fewer condo investors are listing units for rent, either because completions have slowed or because some have sold.
- Existing tenants are staying put, so fewer units turn over.
The July release doesn't say which of these is doing the work, and it is probably a mix. Whichever it is, a smaller pool of available units gives landlords more pricing power at the margin.
The segment detail is uneven
The national breakdown shows how differently the segments are behaving:[1]
- Purpose-built rentals were the most resilient property type, down 2.6% year over year to an average of $2,041. Three-bedroom purpose-built rents were essentially flat.
- Condo rentals fell 6.3% to $2,063, led by a 9.6% drop in studio condo rents.
- Houses and townhomes had the steepest decline, down 7.5% to $2,007.
That pattern fits a market where small, investor-owned units faced the most competition, while larger, professionally managed suites held up better. It also suggests that any recovery will be uneven. A tighter Toronto market won't lift studio condo rents and three-bedroom apartments in a purpose-built building by the same amount.
Ontario as a whole recorded the largest monthly increase of any province, up 0.6% across all property types and 0.8% for apartments and condos. Annually, Ontario apartment and condo rents were still down 3.7%.[1]
Geography matters inside the GTA
The local figures show the region is not moving as one market. North York posted one of the country's larger annual increases, up 5.1%, while Markham was down 11.9%.[1] A landlord in a transit-served North York node and one in a suburban condo cluster could be looking at very different conditions under the same "Toronto" headline.
What would confirm a turn
One month of data, or four, doesn't make a trend. Shaun Hildebrand of Urbanation described the national market as stabilizing but not yet recovering, and pointed out that some of the recent strength is typical seasonal momentum heading into the back-to-school period.[1] Analysts watching Toronto will want to see several things before calling a bottom:
- Listings staying below last year's levels through the fall, when seasonal demand normally fades.
- Annual rent change turning positive in Toronto, which at -0.6% is now within reach.
- Fewer concessions in new purpose-built buildings in lease-up, which don't always show up in asking-rent data.
- CMHC's next Rental Market Survey, which measures vacancy and rents in existing purpose-built stock rather than listings.
If those line up, the first half of 2026 may look like the low point of this cycle in hindsight. If listings rebuild in the fall, July will have been a seasonal bounce.
The takeaway
For owners and lenders, the useful discipline is to separate the headline from the inventory. National rent declines are real, but they are concentrated in segments and regions that had the most new supply. In Toronto, the fact that available listings are falling is the more forward-looking number, and it is the one worth tracking month by month.
Sources
[1] National Rent Declines Slow as Toronto Shows Signs of Turnaround as Supply Tightens, Rentals.ca and Urbanation (Aug. 6, 2026): https://press.rentals.ca/467345-national-rent-declines-slow-as-toronto-shows-signs-of-turnaround-as-supply-tightens
[2] Canada's vacancy rate rises amid historically high rental construction, CMHC 2025 Rental Market Report: https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2025/canadas-vacancy-rate-rises-amid-historically-high-rental-construction