The Short Answer
Why did Markham-area rents drop nearly 5%? Average rents in York Region fell roughly 4.5% year-over-year (into early 2026), driven mainly by a wave of new condo completions in Markham, Vaughan, and Richmond Hill that added supply to the one- and two-bedroom segment. Notably, this is a supply story, not weak demand — lease volume actually rose. For landlords, it means pricing realistically, expecting more competition, and understanding which segments held up best.
After years of relentless rent increases, Markham-area landlords are facing something different: softening rents. It's a meaningful shift — but understanding why it's happening matters just as much as the number itself. Michael John Lau, a top real estate agent in Markham and a CPA/CMA, breaks down what's behind the drop and what it means for landlords.
The data: Average rents in York Region declined roughly 4.5% year-over-year (from about $2,821 to $2,695 into early 2026, based on MLS® data), with the Markham area among the softer markets. Some reports show even steeper declines in certain Markham unit types. Crucially, lease volume rose over 11% year-over-year — meaning this is driven by increased supply, not falling demand. Figures from MLS® rental data and rent reports (early 2026); confirm current figures, as rental data shifts monthly.
Why Rents Are Softening: A Supply Story
The single most important thing for landlords to understand is why rents dropped — because the cause is reassuring:
A wave of new condo completions
Markham, Vaughan, and Richmond Hill have seen a significant number of new condo buildings completed and their units hit the rental market. This surge of new supply — concentrated in the one- and two-bedroom segment — is the primary driver of softer rents. Many of these units were bought pre-construction by investors in 2021–2022, now all leasing up around the same time.
Demand is actually strong
Here's the key: this isn't a demand problem. Lease volume grew over 11% year-over-year — renters are active and renting. The moderation is supply-driven (more units to choose from), not a sign of weakening rental demand. That's a fundamentally healthier situation than a demand-led decline.
Detached and townhouse rentals held up better
Just like the sales market, the rental softening is concentrated in the condo segment. Detached and townhouse rentals held their value comparatively better across the region — a segment distinction that matters for landlords.
Neeraj Moolchandani on Managing a Softening Rental Market
Neeraj Moolchandani, REALTOR® at Kaizen Real Estate, makes a point landlords resist and later thank him for. In a softening market, holding out for last year's rent frequently costs more than accepting this year's. Two months of vacancy on a $2,600 unit is $5,200 gone, which no realistic rent increase recovers within the lease term. Pricing to lease quickly is usually the higher-return decision.
The related point Neeraj raises concerns tenant retention. Under Ontario's rent rules, turnover lets a landlord reset to market, but in a market where market rent has fallen, that reset may be downward. Keeping a reliable paying tenant through a soft period is worth more than most landlords calculate, and a modest below-guideline gesture to retain someone good can be cheaper than vacancy plus turnover costs plus a lower market rent.
What This Means for Landlords
Price realistically to current conditions
With more rental supply available, pricing matters more. Overpricing a unit means longer vacancy while renters choose competing options. Pricing to what comparable units are actually leasing for today is essential to minimize costly vacancy.
Expect more competition — presentation counts
In a market with more choice, your unit needs to stand out. Clean presentation, good photos, and move-in-ready condition help attract quality tenants faster in a more competitive field.
Know your segment
If you own a condo, you're in the softer, more competitive segment — realistic pricing and strong presentation matter most. If you own a detached or townhouse rental, you're in a comparatively stronger position. Understanding where your property sits helps you set expectations.
Understand the rent-control picture
An important nuance: Ontario's annual rent-increase guideline only applies to units first occupied before November 15, 2018. Most newer condo buildings are exempt, meaning landlords can reset to market rent between tenancies — relevant both for setting rents and for tenant-retention strategy in a softer market. (This is general information; confirm your specific situation.)
Price to Lease, Not to Last Year
Vacancy costs more than the rent difference. Book a private consultation with the Kaizen Real Estate Team.
The Bigger Picture for Investors
For real estate investors, the current rental softening is worth putting in context. Rents remain substantial (Markham averages among the higher in the GTA), and the decline is a supply-cycle adjustment, not a collapse — with strong underlying demand (rising lease volume) and Markham's powerful fundamentals (jobs, schools, immigration, desirability) intact. Investors who bought pre-construction may find current rents closer to — or occasionally below — original projections, which underscores the importance of realistic underwriting. But the long-term rental demand story in Markham remains strong.
Michael John Lau, one of Markham's leading REALTORS® and a CPA/CMA, brings a genuinely analytical, numbers-first perspective to rental and investment decisions — helping landlords price realistically, understand their segment, and see the full picture behind the headlines. If you're a landlord or investor navigating today's rental market, let's talk through your specific situation.