For the past two years, the story in Toronto's condo rental market has been about oversupply. The region saw a record wave of new condo completions, and most of those units were bought by investors who put them straight onto the rental market the day they took possession. On top of that, investors who tried to sell their newly completed units and couldn't get a price that made sense ended up renting them out instead. The rental market got flooded with small units, and rents fell for two years.
That is no longer what we are seeing.
At the end of September there were 5,978 condos listed for rent across the Toronto area, down 29% from the same month last year and 44% below the peak of 10,598 we saw last November. The decline has been accelerating all year. Inventory was flat compared to last year in March, down 8% in May, down 20% in July and down 29% in September.
The reason inventory is falling is that leasing activity has stayed very high while the flow of new listings has slowed.
There were 6,147 condo leases in September. That is down 3% from last September, which was the busiest September on record, but it is 29% above the average for the previous five Septembers and more than 50% above the average for the previous ten. Leasing has been running 25% to 35% above the five-year norm every month this year. Through the end of September, 2026 has seen more condo leases than any year in our data, which goes back to 2003, slightly ahead of 2025.
New listings have been moving the other way. The surge in completions kept pushing newly built units onto the rental market well into this year. New rental listings were running 30% to 37% above the five-year norm in the first four months of 2026. Since May they have been falling year over year, and by September they were down 12% to 7,669, only 13% above the five-year norm. The wave of newly completed units coming to market is easing.
With leasing holding up and fewer new units arriving, the surplus that built up over the past two years is being absorbed. Renters leased 80% of the condos that came to market in September, up from 73% last year and the highest September absorption rate we have seen since 2016. The average condo leased in 20 days, compared to 22 last year, and there is now about one month of rental inventory, down from 1.3 months.
The median condo rent in the Toronto area was $2,500 in September, exactly where it was a year ago.
A flat number doesn't sound like much, but it marks a change in direction. Rents were falling 4% to 6% year over year through most of 2025, and they were still down 4% as recently as March.
Rents are still well below their peak. The median condo rent hit $2,800 in July 2023. A one bedroom that rented for $2,600 in September 2023 rents for $2,300 today, 12% less. Two bedrooms are down 9% to $2,900 and three bedrooms are down 11% to $3,350.
If we look back further, condo rents have barely moved in seven years. The median is up just 6% from September 2019, and one bedrooms are up only 5%. Once you account for inflation, condo tenants are paying less in real terms today than they were in 2019. For anyone renting a condo, this has been the best stretch of the market in a long time. With inventory falling this quickly, I don't expect it to last.
One of the more interesting trends in the data is how differently the city and the suburbs are behaving.
The suburban condo rental market was about a year behind Toronto. Last September, the number of condos for rent in the 905 was still up 36% from the year before, while in Toronto it was already down 10%. A year later, suburban inventory is down 37% and the city is down 25%.
Peel has seen the sharpest drop, with condo rental listings down 49% from last year and new listings down 26%. York is down 30% and Halton 32%. Rents are flat to slightly lower in every region, so the tightening hasn't shown up in prices yet.
Rental inventory normally builds through the fall, so October and November will tell us whether this tightening holds. Through the middle of October, the number of condos for rent was still running about a quarter below last year, the same gap we saw in September.
If new listings keep falling at the current pace, we will head into 2027 with the fewest condos for rent since 2023, and I would expect rents to start rising again next year. That will be welcome news for the investors who have been renting out their units at a loss. For renters, the window of falling rents and plenty of choice is closing.