Condominium lease transactions in the Greater Toronto and Hamilton area reached a record high of 18,923 units in Q2‑2026, rising 5 per cent from a year ago, according to the latest data from Urbanation. Over the first half of 2026, a total of 34,150 condo leases were signed — an 11 per cent increase from the same period last year and the third consecutive year of record first‑half activity. Leasing has continued to break records despite a pullback in population growth, reflecting pent‑up demand being released as rents have become more affordable. Growth in lease transactions outpaced the 2 per cent increase in condo rental listings during Q2, marking the fourth straight quarter in which demand growth exceeded supply growth.
“The GTHA rental market is showing its first real signs of progress towards recovery,” said Shaun Hildebrand, President of Urbanation. “Renters are responding to two years of falling rents, and with condo completions now receding, demand is outpacing supply. Rents have likely found their floor, with strong upside in the years ahead as condo completions continue dropping and population growth rebounds.”
Active condo rental listings at the end of Q2 declined to 5,366 units, down 13 per cent from a year ago and representing the largest annual decrease in four years. Months of supply fell to 0.9 months from 1.2 months in Q2‑2025, moving below the long‑term average of 1.0 month. The tightening coincided with the start of a long‑anticipated slowdown in condo completions, which had pushed a record volume of investor‑owned units into the rental pool over the past two years.
With inventory receding, average condo rents increased 2.5 per cent from the first quarter to $3.74 psf ($2,545 for 681 sf) in Q2 — the strongest quarter‑over‑quarter gain in three years. On an annual basis, condo rents were down 1.3 per cent, the smallest decline since rents began falling in Q2‑2024.
The purpose‑built rental market also recorded its strongest first half on record. Net absorption within buildings completed since 2000 totalled 1,888 units in Q2, a 59 per cent increase over last year, bringing the first‑half total to 3,205 units — up 44 per cent from 2025. At the same time, new supply began to ease, with 2,664 units in 10 projects reaching first occupancy in the first half of 2026, down 21 per cent from the recent high of 3,391 units delivered a year earlier.
Within buildings completed since 2000 that were at least one year old, the vacancy rate declined to 6.8 per cent in Q2 from 7.9 per cent in Q1, while remaining above the 5.5 per cent rate in Q2‑2025. Including the 44 buildings still in their initial lease‑up phase, which contained 12,192 units, total vacancy across the stock built since 2000 fell to 12.4 per cent from 14.7 per cent a year ago and a peak of 15.5 per cent in Q1‑2025. Incentives remained widely used but edged lower, offered at 64 per cent of projects in Q2 compared with 66 per cent in Q1. The most common incentives were one or two months of free rent.
Average face rents for units available to lease in purpose‑built rentals completed since 2000 were essentially unchanged from the first quarter at $4.05 psf ($2,864 for 707 sf), decreasing 1.7 per cent from a year ago. After accounting for the monetary value of incentives, net rents averaged $3.51 psf — also unchanged quarter‑over‑quarter — with the 13 per cent discount from face rents worth approximately $377 per month for the average unit.
Rental development activity continued to expand. A total of 6,291 purpose‑built rental units started construction in the first half of 2026, a 50 per cent increase over the same period last year and the highest first‑half total in decades. New rental project submissions and condo‑to‑rental application conversions added 27,715 units to the future supply pipeline during the first half, down 14 per cent from the record 32,387 units added a year ago. As of Q2‑2026, a total of 31,645 purpose‑built rental units in 102 projects were under construction across the GTHA — the highest in decades.
However, the growth in rental construction is not offsetting the contraction in condo development. Condominium units under construction in the GTHA fell to 38,252 in Q2‑2026, down 39 per cent from a year ago and 64 per cent below the peak of 105,421 units in Q2‑2023. Combined, total apartment units under construction across the GTHA declined 21 per cent year‑over‑year to 69,897 units. Since roughly half of new condo supply is typically used as rental, the additional purpose‑built rentals now getting underway will replace only a portion of the rental supply being lost as the condo pipeline unwinds.
