While rental demand completely outpaced supply in Toronto throughout 2023, there may be some relief on the horizon this year as interest rates drop and new construction projects develop, according to the latest Canadian National Report by rental platform, Zumper.

The report highlights the "pinch" lower-income renters felt throughout the past year, as they struggled with below-average vacancy rates — which hit a record of 1.5 per cent in Canada — to secure more affordable units. 

The platform analyzed hundreds of thousands of listings last month to examine median rent prices across the 23 largest cities in the country, and found that despite the price growth that's expected in 2024, Toronto actually saw rents declining for both one-bedroom and two-bedroom options. 

While Toronto remained the second priciest city in the study, the average one-bedroom rent dropped two per cent to $2,450. Similarly, two-bedroom fell 0.9 per cent to $3,200, which is a decline for the third consecutive month. 

Median rent prices for all homes available or vacant in January 2024. Rankings were based on the median price of a one-bedroom apartment. Source: Zumper.

"At the top, Vancouver, Toronto and Burnaby, the three most expensive cities, all experience flat or declining monthly rates," the study notes. "Toronto and Burnaby actually had the largest monthly one-bedroom rent price declines, both down two per cent." 

The national one-bedroom rent price growth rate was also found to have decelerated for the fifth month in a row, which was up 7.9 per cent year-over-year in the latest report. 

Elsewhere in the province, the study found that Kingston was one of the Canadian cities with the fastest growing monthly one-bedroom rent, moving up to become the 11th priciest market with rent jumping 5.8 per cent last month. 

Source: Zumper.

"While 2024 will likely not have as large of a spike in rent growth as last year, prices will still climb overall. As interest rates start to drop, activity will pick up in the home buying space so that should give some reprieve to the demand in the rental market," the study concludes. 

"There is also new construction underway, however it will take some time for this new supply to translate into tangible relief for renters, perhaps closer to the end of year."