The Toronto Real Estate Board released its rental market figures for the first quarter of 2019, reporting an increase in both listings and leases of condo apartments in the Greater Toronto Area.
There were 6,646 condo apartment leases reported through the MLS system in the first three months of the year, which is a 7.7% year-over-year increase. New listings outpaced leases by a significant rate, increasing 22.4% compared to the first quarter of 2018. Despite the surge in new listings, TREB is still calling for more rental supply in the GTA.
“Affordable rental housing is an important component in the overall competitiveness of the GTA. Businesses and individuals are more likely to locate in regions where there is a ready supply of affordable housing alternatives,” says Jason Mercer, TREB’s Chief Market Analyst. “While condominium apartment investor-owners have provided the great majority of new rental stock over the past decade, we know there is a need for many more rental units, as evidenced by vacancy rates hovering around 1%. TREB looks forward to working with policy makers in the design of proactive housing policies pointed at the development of new rental supply, including during the recently announced City of Toronto Housing TO consultations.”
The average rent for a bachelor condo apartment in the GTA was $1,816 in the first quarter of 2019, which is 9.6% higher than last year. The number of bachelor leases also increased from 244 in the first quarter of 2018 to 268 in 2019 - nearly a 10% increase. It’s possible that those who would likely rent a one-bedroom have been priced out of those options.
The average rent for a one-bedroom condo apartment in the GTA was $2,143, a 7.4% year-over-year increase, and there were 3,882 leases, which is the most of any other rental condo unit size. A year ago, the average one-bedroom rent was $1,995.
There was similar growth in rent and leases among two-bedroom condo rentals. The average rent went up 6% to $2,811, while leases increased 8.5% with 2,369 units leased. It’s possible that more people were teaming up with a roommate and renting two-bedrooms in an effort to split this cost as opposed to paying more than $2,000 on their own for a one-bedroom.
Three-bedroom condo rentals aren’t that popular in the GTA, partially because there simply aren’t that many available. Rent for a three-bedroom unit went up 9.6% to $3,665, and the number of leases fell 6.6% with only 127 leased.
“It makes sense that we continued to see an increase in condominium apartment rentals during the last quarter,” says TREB President Garry Bhaura. “The GTA’s population continues to grow as people are attracted to the region by its strong economy and diversity. At the same time, it was also good to see an increase in the number of units listed for rent. However, with average rents continuing to increase well-above the rate of inflation on an annual basis, market conditions clearly remain tight. Development of more rental supply is imperative to the long-term sustainability of the GTA rental market.”