What does it take to make a GTA condo rental work right now?

By Cliff Rego  ·  CEO, Founder and Broker Owner

Condominium prices in the GTA have come down, which is the half of a soft market that favours a buyer.

Across all TRREB areas the average condominium apartment sold for $617,593 in August 2026. That is down 3.6% from a year earlier, on Toronto Regional Real Estate Board figures.

Rents eased over the same stretch, on the board’s rental market report. At twenty per cent down, an average one bedroom does not cover its own monthly costs today. So the useful question is what it takes to make one work.

Below we run the math with round illustrative numbers. We look at how much of the monthly gap comes back to you, and at what changes the answer.

What have GTA condo prices and rents actually done?

Both eased over the past year, and condominium apartments remain the softest part of the GTA market.

The August average quoted above is an average of what actually sold across the whole board area. It shifts with the mix of units trading in any given month, so treat it as a rough guide to value.

The board’s benchmark price tracks a typical unit, which makes it the fairer way to read a trend over time. Across all TRREB areas the apartment benchmark was $531,200 in August, down 7.1% from a year earlier.

On the rental side, the board’s report for the second quarter of 2026 puts the average one bedroom rent at $2,273. That is a decline of 2.3% from the same quarter a year earlier.

Two bedroom units averaged $3,013 over the same period, down 1.7% from a year earlier.

Supply explains much of it. Across all TRREB areas 27,844 condominium apartment units were listed for rent in the quarter and 21,251 were leased, counting every bedroom type.

Across all home types the board counted 4.6 months of inventory in August. Months of inventory is how long it would take to sell everything listed at the current pace of sales. As a rough industry rule of thumb, under about three months is read as favouring sellers and over about six as favouring buyers. On that reading the market sits in balance, with room for buyers.

What do the numbers look like on one unit?

At twenty per cent down on an average one bedroom, the rent falls short of the monthly costs.

Here is a worked example. The figures are round numbers chosen to keep it easy to follow. They are illustrative, and they are neither a quote nor a promise.

Say you buy a unit for $600,000 with $120,000 down. That leaves a mortgage of $480,000.

The board average covers every bedroom type, so a one bedroom often sells for less. Run your own unit against the rent it can realistically achieve.

At an illustrative rate of 4.5% over a twenty five year amortization, the payment works out to about $2,657 a month. That figure uses semi-annual compounding, which is the Canadian convention.

Fixed mortgage rates follow the bond market and move often, so use a real quote when you run your own numbers.

Now add the other monthly costs. Condominium fees of $650 and insurance of $50 are illustrative placeholders.

Property tax is not a placeholder. The City of Toronto 2026 residential rate of 0.767311% works out to about $384 a month on this purchase. Rates differ by municipality, so check the one that applies.

That brings the carrying cost to about $3,740 a month.

Against the average one bedroom rent above, the monthly gap is close to $1,467. Over a year that is about $17,600, before you count vacancy, repairs or property management.

How much of that gap comes back to you?

A good share of it, because part of every mortgage payment is principal rather than interest.

On the same illustrative example, about $10,700 of the first year’s payments goes to principal. That share grows every year the mortgage runs, which is simply how amortization works.

Set that against the shortfall and the first year cost is closer to $6,900. That figure ignores any change in the value of the unit, in either direction.

This is why cash flow on its own is a thin way to judge a rental. It is one line in the math rather than the whole of it.

Whether the trade suits you depends on your plan. Funding roughly $6,900 a year to build equity is a different exercise from needing a unit to pay for itself from the first month.

Who does this work for right now?

It works best for buyers with more equity, a longer horizon, or a different unit and market in mind.

More equity. On the same illustrative rate and amortization, the rent would cover the carrying costs at a down payment near $385,000. That is roughly sixty four per cent of the purchase price.

A longer horizon. A monthly gap weighs less over fifteen years than over three, because the principal paid down grows each year and the balance falls.

A different unit. Two bedroom rents sit well above one bedroom rents. Whether the price difference justifies that varies by building, so it is worth running both.

A different market. Hamilton, Waterloo Region and Oakville-Milton price differently from the GTA condominium market. We can pull current board figures for any of them.

A different goal. If the purchase is about holding a long term asset, the shortfall becomes a budget line to plan for.

What rules shape what you can charge?

Ontario caps most rent increases each year, and the cap is published well in advance.

The province set the 2027 rent increase guideline at 1.9%. That is the most a landlord can raise the rent for an existing tenant in a covered unit. Going above it needs approval from the Landlord and Tenant Board.

Two exceptions matter to investors. Units first occupied for residential purposes after November 15, 2018 are exempt from the guideline. When a tenancy ends and a new tenant moves in, the rent is negotiated fresh between the landlord and that tenant.

Check which category a unit falls into before you build a plan around rent increases. A newer building and an older one behave quite differently under the same rules.

What do we check before an investor signs?

We start with the documents, because most of the surprises live there.

The status certificate comes first. It sets out the corporation’s budget, the state of the reserve fund, any special assessment and any litigation. A thin reserve fund today often means a fee increase later.

Ask for the fee history rather than the current figure alone. A fee that has climbed steadily year after year tells you more than the number on the listing.

Confirm the rules on leasing. Some corporations restrict short term rentals, and many require that the corporation be notified of a tenancy.

Budget the closing costs properly. Ontario charges land transfer tax on the purchase. Inside Toronto, the city charges a municipal land transfer tax on top of it.

Check the rate environment rather than assuming it. The Bank of Canada held its policy rate at 2.25% on September 2, 2026.

The next scheduled decision is October 28. In that statement the Bank said Governing Council “is prepared to adjust monetary policy as needed.”

If you are weighing a rental purchase this autumn, we can run these numbers on a specific building with you. See our investment services or book a strategy session.

Quick Questions

Can a GTA condo rental cover its own costs right now?
At twenty per cent down on an average one bedroom, no. On Toronto Regional Real Estate Board figures the rent falls short of the monthly carrying costs. A larger down payment, a different unit type or a different market can change that, so it is worth running on a specific building.

Does the monthly shortfall mean the purchase loses money?
Not on its own. Part of every mortgage payment goes to principal rather than interest, so some of the shortfall comes back as equity. Judge a rental on the whole picture, including principal paydown and your holding period, and get advice from your accountant.

How much can a landlord raise rent in Ontario in 2027?
The province set the 2027 rent increase guideline at 1.9% for covered units. Units first occupied after November 15, 2018 are exempt from the guideline. A landlord can also apply to the Landlord and Tenant Board for an increase above the guideline.

What down payment do you need for a rental property in Canada?
Twenty per cent is the practical floor. Canada Mortgage and Housing Corporation insures non-owner-occupied rentals of two to four units only up to eighty per cent of value. Its stated minimum equity requirement is twenty per cent. Lenders add their own conditions, so get a written answer from a mortgage broker.

Corcoran Horizon Realty

This article is general information, not tax, legal or financial advice. The mortgage, fee, tax and insurance figures in the example are illustrative round numbers rather than quotes. Board figures are for All TRREB Areas. Market and program details are from the Toronto Regional Real Estate Board, the Government of Ontario, the City of Toronto, the Bank of Canada and Canada Mortgage and Housing Corporation, and are current as of September 28, 2026.