Toronto landlords vying for tenants with rent-free months, $500 gift cards

CBC

5 days ago

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Toronto landlords are trying to lure in tenants with rent-free months, complimentary Wi-Fi and $500 gift cards amid an unprecedented supply of condos and lower rents.
Real-estate market experts say the fierce competition — which extends beyond the Greater Toronto Area — is giving renters more negotiating power, echoing trends last seen during the COVID-19 pandemic.
Two months of free rent, free parking and gift cards for food delivery or public transit are among thousands of dollars' worth of perks and discounts advertised on Toronto rental listing websites and apps.
While such incentives are ubiquitous in Toronto, landlords in other GTA cities and the Greater Hamilton Area are also locked in a tight contest that benefits renters.
Michael Niezgoda, senior manager of market research and development at Urbanation, a Toronto-based real estate research firm, said a record 29,000 condominium units were completed in the Greater Toronto and Hamilton Area in 2024 and 40 per cent of that new supply has since entered the rental market.
"This has created a lot of competition between condo owners, they're very motivated to get tenants in to help pay their mortgage after closing on their new condos," he said.
There were 6,549 condo units available for lease in the Greater Toronto and Hamilton Area at the end of this year's first quarter — a 29 per cent increase from a year ago and 160 per cent higher than two years ago, last month's Urbanation report shows.
The report also found that 63 per cent of buildings offered incentives to renters, more than double from a year ago.
The vacancy rate for purpose-built rentals completed since 2000 in the Toronto and Hamilton areas was 3.5 per cent in the first quarter this year, the highest level since nearly four years ago.
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The report also found that condo rents are 10 per cent lower from their peak in 2023. Niezgoda said the second quarter might see a further drop, even though the majority of landlords are resistant to the idea.
"Looking at all this supply hitting the condo markets and (they) are thinking this could be a short-term market impact," he said. "To stay competitive in this short-term market, let's offer incentives instead of dropping rents."
Toronto Regional Real Estate Board's chief information officer Jason Mercer also said the record supply of condominium apartments is behind the surge in rental incentives.
Mercer said he has seen similar trends during the financial crisis of 2008 and the COVID-19 pandemic, which gave renters "negotiating power on price."
"You also just benefit from a lot of choice, so it's easier to find an apartment, for example, that perfectly meets your needs," he said.
The federal government has implemented a series of measures aimed at stabilizing Canada's population growth and addressing housing shortages, including a reduction in immigration levels and international student permits.
But Mercer said demand for housing is still high and the number of lease transactions recorded by the board has increased because the population continues to grow and the GTA remains a top destination for newcomers.
Rent costing hundreds of dollars less than in 2024
According to recent data from Rentals.ca and Urbanation, the national average asking rent in April was down year-over-year for the seventh straight month, with Ontario recording the largest decline. Asking rents in the province fell 2.7 per cent to an average of $2,338.
Zumper, a rental website operating in Canada and the United States, also found in April that rents for one-bedroom and two-bedroom apartments in Toronto had declined 8.4 per cent and 10.6 per cent, respectively, compared to the same month the year before.
Zumper spokesperson Crystal Chen said many people were "priced out" of the city when rents surged dramatically in 2023. But reduced demand and broader economic uncertainty mean apartments are now being rented for hundreds of dollars less than a year ago.
"All of this together, the new supply, the weaker demand drivers, has resulted in a slower market," Chen said, adding it's "a great time for a Toronto renter to find an amenity rich apartment that may have previously been out of reach."
But experts say the current market dynamics favouring tenants may not last long.