Buyer's market? How about renter's market...

Realist Admin
1 day ago
4 min read

When sellers court buyers we call it a buyer’s market. When landlords court tenants? That’s the economy we just slipped into.

Over the past twelve months the average rent for a downtown Toronto two‑bedroom has dropped from $3,100 to roughly $2,900. The liv.rent index shows a further 3–4 % slide for one‑bedroom units just in June. Add the growing stack of duplicate MLS listings—the very same condo offered for $679,000 or $2,750 a month—and the signal is deafening: 2025 belongs to tenants.

Below is a data‑driven tour of how we got here, what comes next, and how renters (and the landlords who want to keep them) can win.

1. Falling Rents, Rising Opportunity

Where the declines are sharpest

Downtown Toronto, Markham and North York each posted 3–5 % month‑over‑month rent drops in June.
Metro Vancouver is tracking the same direction, though from an even higher peak.

Where rents are holding up

Halifax, Calgary and Windsor barely moved.
A few Ottawa suburbs actually inched higher.

If you signed a lease in mid‑2023 you’re likely paying 5–10 % more than identical units are asking today—$150 to $300 a month on a typical $2,900 apartment. That is exactly the delta that justifies breaking a lease early, sub‑letting, or negotiating a lower renewal.

2. Why Prices Keep Chasing Rents Down

Investors value property on the income approach: net rent divided by the cap rate equals asset price. Lower rents mean lower income, which means lower condo values.

That feedback loop is gaining speed because:

Distressed closings. Roughly 50,000 pre‑construction condos will register in Ontario this year. Many buyers planned to flip; instead they’re closing at 5 % mortgage rates and starting day one in the red.
No capital‑gain exit. GTA condo resale prices are already six per cent lower than a year ago, wiping out the quick‑flip option.
More investor units. Investors now make up 19 % of all buyers—the fastest‑growing segment—while first‑time buyers retreat.
CMHC MLI Select. Condo supply has been backfilled with purpose-built rental units, built and financed using CMHC MLI select, which

3. Population, Policy & the Great Downshift

CMHC has finally put in writing what economists have said for years: rents track population growth. Ottawa was happy to dismiss the link while rents rocketed higher, but now ministers are taking credit for rent relief after capping immigration. It’s carbon‑tax déjà‑vu: “not inflationary on the way up, totally deflationary on the way down.”

One stark example is international‑student demand. Ontario colleges that boosted enrolment ten‑ to forty‑fold now project more than 10,000 layoffs. Dorm‑adjacent rentals are suddenly sitting empty.

4. Oversupply Isn’t Evenly Spread

Canada now has the highest ratio of rentals under construction to existing stock in recorded history. But exposure is regional:

British Columbia: A record pipeline of purpose‑built rentals collides with softer immigration.
Atlantic Canada: Projects launched for a boom in international students are arriving just as that demand evaporates.
Ontario (GTA): Shadow supply matters more than cranes; tens of thousands of investor‑owned condos are hitting the resale and rental market all at once, even before the big wave of purpose‑built projects finishes.

Ontario looks “safer” if you only track official purpose‑built numbers, but that ignores the condo flood already in motion.

5. Ottawa’s Quiet Pivot Toward Renting

Watch CMHC’s balance sheet, not politicians’ pressers:

In 2023 CMHC insured more dollar value of apartment buildings than single‑family homes for the first time ever.
Counting by units, rentals passed owner‑occupied homes years ago, and the gap blew wider after the 2022 launch of MLI‑Select—a program that offers 50‑year amortizations, as little as five per cent down and the cheapest rates in the market, but only for purpose‑built rentals.

Developers can read a term sheet. Condos are yesterday’s business model; apartments are tomorrow’s.

6. Economic Darwinism: Weak Landlords Get Squeezed

The survival ranking looks like this:

Large REITs and other institutional owners—they have scale, fraud‑detection software and 50‑year debt.
Experienced multi‑property investors—they can average cash‑flow across a portfolio.
Accidental landlords—a single presale gone wrong, losing $800 a month, no equity buffer.

Ontario’s Landlord & Tenant Board is still buried under a record backlog, and OpenRoom.ca now tracks $279 million in unpaid rent—an average hit of $16,000 per file and rising 27 % year‑over‑year. Mom‑and‑pop owners are one bad tenant away from insolvency.

7. The Tenant Playbook (2025 Edition)

Shop like an analyst. Pull the latest liv.rent or Rentals.ca report before you renew.
Leverage competition. If five similar suites in your building are vacant, quote those listings when you ask for a lower rate or a free month.
Insist on verification. On liv.rent you can filter for verified listings—landlords must either pass a postcard test or upload land‑title documents.
Background the landlord. Search OpenRoom to see if your would‑be owner is named in arrears cases.
Validate ownership. A quick land‑registry lookup (or even a Realtor.ca link) kills the “fake landlord” scam that spiked alongside unemployment.

8. The Landlord Counter‑Strategy

Refinance quickly. Five‑year fixed rates have dipped below four per cent, and every basis point extends your runway.
Incentivize before you discount. Free parking, pet‑friendly policies or a fresh coat of paint often cost less than dropping the rent permanently.
Screen smarter, not harsher. Third‑party ID and income verification beat gut instinct—especially with forged pay stubs everywhere.

9. Policy: Give Tenants Access to Houses, Too

Detached homes dominate North American wealth but almost never appear on Toronto’s rental market—unlike New York, Berlin or Melbourne. Opening that stock to tenants would deepen choice, let prices find an equilibrium and take political heat off the whole housing file.

10. Where We Land Next

Next 6–12 months: Expect rents to soften further in big‑city cores as distressed condos quest for tenants.
18–36 months: Purpose‑built rentals shift the bottom of the market from mom‑and‑pop investors to institutions, stabilising quality and fraud risk.
Five years and beyond: Canada edges toward a European mix—fewer owners, more professional landlords, stronger tenant protections.

For aspiring homeowners the smartest move may be to rent through the trough, bank the savings and buy once the income approach finishes repricing investor stock.

Sources & Further Reading

liv.rent Toronto Rent Report, June 2025
CMHC Mortgage Lending & Insurance Statistics, 2022–2024
Bank of Canada Housing‑Finance Snapshot, Q2 2025
OpenRoom Arrears Ledger, April 2025
Ontario Ministry of Municipal Affairs & Housing, LTB Caseload Plan 2024‑25

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