Free parking, free wifi and signing bonuses are just some of the perks apartment building owners are offering prospective tenants 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 tenants in the first quarter of 2026 — up from 62 per cent a year ago and double the amount offered two years ago.
Urbanation said the use of incentives has become 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” like free WiFi and $500 signing bonuses.
The firm found that the most common incentive in the first quarter of the year was two months of free rent, offered by 47 per cent of rental projects, up from 32 per cent in the same period last year. At the same time, the number of projects offering one rent-free month dropped to 42 per cent from 53 per cent last year.
Other variations of the free rent theme became popular in the first quarter, with offers of a free month-and-a-half and a free three months increasing from two per cent to six per cent and one per cent to four per cent, respectively.
A break on rent wasn’t the only incentive that became more common last year. Cash move-in bonuses also topped the list of perks, jumping from 10 per cent to 17 per cent year over year in Q1.
Rising inventory and weakened demand in both the resale and new condo market have redirected investors and institutional buyers to the rental market. Canada Mortgage and Housing Corporation has also noted a rise in projects pivoting from ownership to rental over the last year.
Purpose-built rentals are facing unprecedented competition, said Shaun Hildebrand, president of Urbanation.
“Rental operators are grappling with a deluge of supply at the moment, due to intense competition from the condo market and a surge in tenants moving to get a better deal,” he said.
Vacancy rates in buildings that have passed the lease-up phase and are now operating normally increased by 5.4 per cent in the first quarter of 2026, up from 3.6 per cent a year earlier.
Urbanation reported that this occurred as population inflow slowed and tenant turnover added to the supply of available units. The availability rate, which includes vacant units and units that have an imminent vacancy on the books, reached a record 8.0 per cent.
The impact of rising vacancies and more units coming to market is beginning to show up in pricing. Urbanation found that, when accounting for the monetary value of incentives offered in the market, net rents in the first quarter declined by 3.8 per cent annually to a 16-quarter low of $3.52 per square foot. The incentives reduced rents by an average of 13 per cent or $379.
“This brought purpose-built rents in line with condo rents averaging $2,543 in Q1,” Urbanation said in its report.
While it appears that rental completions slowed to the tune of 61 per cent year over year in the first quarter, Urbanation reported that the eight-quarter low of 915 units negates several projects that pushed occupancy timelines 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 over the next year.
Developers are continuing to advance new rental projects in early 2026, with 3,674 units (up 12 per cent) breaking ground in the first quarter, bringing the latest 12-month total for starts to a multi-decade high of 10,388 units.
“Supply pressures will persist this year as apartment completions run high and population growth slows, creating a window of opportunity for renters to capitalize on improved affordability,” Hildebrand said.
• Email: shcampbell@postmedia.com