Free parking, free Wi-Fi and signing bonuses are just a few of the perks multifamily property owners are offering potential renters as competition in the rental market intensifies.
According to a new report from real estate research firm Urbanation, 66 per cent of rental projects in the Greater Toronto Hamilton Area (GTHA) offered incentives to attract renters in the first quarter of 2026 – an increase from 62 per cent a year ago and double the number two years ago.
Urbanation said the use of incentives was widespread in the GTHA, with institutional, purpose-built operators such as CAPREIT and Minto Apartments offering months of free rent, free parking and “special offers” such as free Wi-Fi and $500 signing bonuses.
The company found that the most common incentive in the first quarter of the year was two months of free rent, offered by 47 percent of rental projects, up from 32 percent in the same period last year. At the same time, the number of projects offering a rent-free month fell from 53 percent in the previous year to 42 percent.
Other variations on the free rent theme were popular in the first quarter, with offers of one and a half free months and three free months rising from two percent to six percent and from one percent to four percent, respectively.
A rent cut wasn’t the only incentive that became more common last year. Cash collection bonuses also topped the list of perks, rising from 10 percent to 17 percent year-over-year in the first quarter.
Rising inventory and weaker demand in both the resale and new condo markets have shifted investors and institutional buyers to the rental market. The Canada Mortgage and Housing Corporation has also seen an increase in projects moving from ownership to rentals over the last year.
Purpose-built rental housing is facing unprecedented competition, said Shaun Hildebrand, president of Urbanation.
“Rental companies are currently struggling with an oversupply of listings as the condo market becomes highly competitive and more renters leave in search of a better deal,” he said.
The vacancy rate in buildings that have gone through the leasing phase and are now in normal use rose by 5.4 percent in the first quarter of 2026, compared to 3.6 percent in the previous year.
Urbanation reported that this occurred as population influx slowed and tenant turnover increased the supply of available units. The availability rate, which includes vacant units and units with impending vacancy on the books, reached a record 8.0 percent.
The impact of rising vacancies and more units coming to market is starting to show in pricing. Urbanation noted that net rents in the first quarter, taking into account the monetary value of incentives offered to the market, fell 3.8 percent annually to a 16-quarter low of $3.52 per square foot. The incentives reduced rents by an average of 13 percent, or $379.
“This brought functional housing rents in line with condominium rents, which averaged $2,543 in the first quarter,” Urbanation said in its report.
While it appears that first-quarter rental closings slowed 61 percent year-over-year, Urbanation reported that the eight-quarter low of 915 units wipes out several projects that pushed occupancy deadlines to later quarters. More than 3,200 units across 17 projects are expected to come online in the second quarter alone, and nearly 9,000 units are expected next year.
Developers continue to push forward new rental projects in early 2026, with 3,674 units (up 12 percent) breaking ground in the first quarter, bringing the latest 12-month construction starts total to a multi-decade high of 10,388 units.
“Supply pressure will continue this year as housing construction rates remain high and population growth slows, creating an opportunity for renters to benefit from improved affordability,” Hildebrand said.
• Email: shcampbell@postmedia.com