In the second quarter of 2019, the Greater Toronto Area was hit with a wave of new rental supply, but that doesn’t mean rent came down.
According to the Toronto Real Estate Board’s second quarter data, there were 9,749 condos rented through the MLS system in the second quarter of the year. This is nearly a 15% year-over-year increase.
“The GTA population continues to trend upward, as the region attracts people from around the world, both on a permanent and temporary basis, to take advantage of a diversity of employment opportunities,” says TREB President Michael Collins. “Many of these newcomers and existing GTA households choose to rent. With this in mind, it makes sense that we continue to see strong year-over-year increases in the number of condominium apartments rented.”
New condo rental listings outstripped leases with 15,337 units coming to market in the second quarter, which is 28.8% higher than the same period last year and is almost double the annual growth rate. This is exactly what the GTA’s rental market needed.
The majority of the condos leased were one-bedrooms with 5,656 units leased from April to June. Leases increased 16% year-over-year and the average rent increased 6.7% to $2,192. Two-bedrooms came in second with 3,412 leases and an average rent of $2,873, which is 4.3% higher than the second quarter of 2018.
There were 412 bachelor units leased in the second quarter with an average rent of $1,824. Compared to the same period last year, there were 24.5% more leases of bachelor units. This is likely due to single tenants struggling to afford one-bedrooms.
“While the rental market remains tight, renters do appear to be benefitting from more supply in the marketplace,” says Jason Mercer, TREB’s Chief Market Analyst. “The pace of year-over-year average rent growth has slowed over the past year. That being said, average condo rents continued to increase well-above the rate of inflation in the second quarter. This suggests that new rental supply, in terms of both purpose-built rental units and investor-owned condominium apartments, is still required in the GTA to keep up with population growth and new household formation.”
One interesting finding is that there were 269 three-bedroom condo leases, which is 47% higher than the second quarter of 2018. Three-bedroom rent averaged 3.4% higher at $3,586. But, an average three-bedroom split three ways would be around $1,195. Perhaps the high rent across the GTA is forcing more singles and couples to take on roommates.