The power dynamic in Toronto's rental market is undergoing a dramatic shift. Landlords and property managers are now aggressively competing for tenants, offering a suite of perks from free rent to grocery gift cards in response to rising vacancy rates and a surge of new inventory.
A Market in Transition
According to data from the real-estate research firm Urbanation, the landscape has changed rapidly. 63 per cent of purpose-built rental buildings across the Greater Toronto and Hamilton Area offered incentives during the third quarter of 2025. Even more telling is the rise in generous rent-free offers: 33 per cent of buildings provided two months or more of free rent, a significant jump from just 11 per cent a year ago.
This trend is driven by fundamental market changes. Toronto's rental vacancy rate climbed to 3.5 per cent in the third quarter of 2025, up from 2.8 per cent a year earlier. Simultaneously, average rents fell by six per cent over the past year. A key factor is record inventory, with 2024 seeing 29,000 condo completions in the GTHA, about 40 per cent of which entered the rental market.
Incentives Become the New Normal
Gone are the days of landlords dictating terms. The current environment is filled with carrots designed to attract and retain tenants. Beyond one or two months of free rent, common incentives now include complimentary Wi-Fi, furniture discounts, and even free air conditioners.
Real estate agent Leila Bates with Strata real-estate brokerage confirms the transformation. "The era of take it or leave it is over," says Bates. "In today’s market, landlords either adapt with competitive perks or they watch their units collect dust. It’s not unfair; it’s just how the game is played now."
Strategic Perks for Long-Term Stability
Developers are taking a strategic approach to these incentives. At the new Bela Square community near Danforth Avenue and Dawes Road, managed by DBS Developments, prospective tenants are presented with clear options. They can choose one month free on a 12-month lease or two months free on an 18-month term. The company also offers targeted promotions, such as grocery gift cards for University of Toronto students to ease moving costs.
Elizabeth Sharp, director of leasing at DBS, emphasizes that this is about more than just filling units quickly. "It’s about finding the right suite for the right person," Sharp explains. "That personalized approach is what sets professional landlords apart. In today’s uncertain economy, renters value stability and predictability. It’s less about moving into a shiny new rental and more about long-term affordability."
She adds that these incentives provide renters with confidence, allowing them to lock in a rate and avoid increases for a longer period. This shift reflects a broader structural change where many would-be homebuyers are choosing to rent long-term due to high interest rates and record home prices, making tenant loyalty a valuable commodity for landlords.
