It continues to get more difficult for people and families looking to rent a condo apartment in the Greater Toronto Area. The Toronto Real Estate Board’s quarterly rental market report shows a significant increase in monthly rent.
In the third quarter of 2018, condo apartment leases increased 5.8% year-over-year to 9,215 transactions. Listings increased by 9.6% to 12,655. Having more listings than leases is a good sign for a tight rental market like the GTA’s, but it doesn’t seem like monthly rent will be dropping anytime soon.
“Sustained population growth and low unemployment continued to drive demand for condominium apartment rentals in the GTA in the third quarter,” says TREB President Garry Bhaura. “Recent major investment announcements positively impacting the GTA economy will only further cement the demand for rental housing, as people move to the GTA to take advantage of quality job opportunities.”
The average rent of a one-bedroom condo apartment increased 9.5% to $2,163 in the third quarter of 2018. Leases of one-bedrooms increased 10.3% to 5,344. The average rent for a two-bedroom condo apartment jumped 8.3% to $2,822, while the number of leases fell 1.7% to 3,289.
“Average rents are continuing to increase at annual rates far beyond the rate of inflation in the GTA as rental demand remains very strong relative to the supply of units available,” says Jason Mercer, TREB’s Director of Market Analysis. “We will need to see a sustained period of time within which growth in the number of rental units listed outstrips growth in the number of units leased before we see the rental market return to balance. Policies like the 2017 expanded rent control provisions contained in the Fair Housing Plan will hinder sustained growth in the supply of rental units.”
The number of two-bedrooms leased will likely continue to fall as the monthly rent increases. Couples who may have rented a two-bedroom for the extra space are being forced to look into available one-bedrooms because of the high rents. There were also 2% fewer three-bedroom condo apartments leased compared to the same quarter in 2017.
As you may have suspected, the number of bachelor apartments leased increased quite a bit, jumping 22.2% with 386 leases. The average rent for a bachelor apartment in the GTA in the third quarter was $1,854, which is 10.9% higher than last year.
November and December are typically slower for the real estate market, but rental is somewhat of a different beast. Most people don’t like moving in the cold, but they will if they have to. It will be interesting to see if listings continue to climb through the rest of the fourth quarter.