A bump in new listings at the end of 2023 helped moderate the pace of rent growth in the Greater Toronto Area (GTA), leading to the smallest annual increase in over two years.

According to the Toronto Regional Real Estate Board (TRREB)’s latest Rental Market Report, the average rent for a one-bedroom condominium apartment in the GTA rose 2.2% on an annual basis in Q4 2023, to $2,552.

Over the same time period, the average rent for a two-bedroom condo increased 3.7% to $3,267, while the price of a bachelor unit jumped 2.7%, to $2,131. Meanwhile, the average rent for a three-bedroom condo ticked up just 1% annually in Q4, reaching $3,906.

Although prices still edged up as 2023 drew to a close, the increases are the smallest the region has seen since rents began to rise in Q3 2021 when the pandemic-era downturn came to an end. In every quarter since, save for Q4 2023, the average rent for a one-bedroom condo has increased between 2.4% and 20.4% annually.

The slowdown seen in Q4 was due in part to a surge of new listings, which offered renters more choice in their housing search. The number of rental units on the market rose 46% annually in Q4, outpacing the 12.6% annual increase in lease transactions.

“The demand for rental housing remained strong in 2023, clearly bolstered by strong population growth driven by immigration and non-permanent migration into the Greater Toronto Area,” said TRREB President Jennifer Pearce.

“Over the same period, elevated borrowing costs presented affordability challenges for would-be home buyers. While many current renters may ultimately become first-time buyers, a large proportion will need to see lower borrowing costs before they commit to purchasing a home.”

The Bank of Canada hasheld interest rates steady at 5% since September, and is expected to begin cutting rates by mid-year. From July 1 to September 30, 2023, Ontario’s population grew by 193,399 people, bringing the province’s total population to 15,801,768.

Toronto Regional Real Estate Board

As of Q4 2023, the priciest one-bedroom condos in the GTA can be found in Richmond Hill, running $2,632 per month, while the cheapest, at $2,068, lie in Innisfil. In the City of Toronto, renting a one-bedroom condo will set you back an average of $2,573 per month.