Toronto’s condo rental market continues to tighten after a brief downturn at the start of the pandemic, with the average cost of a one-bedroom unit now approaching the record high set in 2019.
New data of the Toronto Region Real Estate Board suggests that the average monthly rent for a one-bedroom unit processed by its MLS system reached $2,145 in the first quarter of 2022, which is equivalent to a 17.8% increase from a year to year.
The average monthly rent for a two-bedroom unit, meanwhile, is up 17.2% year-over-year and now stands at $2,867.
The real estate board said rents are now approaching the peak reached just before the onset of the COVID-19 pandemic, when one-bedroom units averaged $2,262 per month and two-bedroom units averaged. $2,941 per month, two records.
“Over the past year, we have seen an upward trend in average condominium apartment rents. This rebound in the rental market materialized as population growth accelerated throughout the past year. Jason Mercer, TRREB’s chief market analyst, said in a press release. “Demand for rental housing is expected to remain strong this year and beyond as job growth continues, immigration and non-permanent migration continue to support housing demand and rising borrowing costs force some young people to suspend their decision to buy a house. ”
Condominium rents fell by double digits early in the pandemic as many tenants left downtown in search of more space during the work-from-home era.
But with many employees now returning to offices, at least part-time, the market appears to be showing signs of recovery.
The latest data from the TRREB shows that the vacancy rate for condominium apartments in the City of Toronto was just 1.9% in the first quarter of 2022, indicating an extremely low supply of available units.
Elsewhere in the GTA, the vacancy rate was even lower, ranging from 0.3% in Durham to 0.9% in Peel.
The real estate board also said there was a 23% decline in transactions on its MLS system in the first quarter of 2022. It said that with rental transactions as a percentage of listings still up year on year on the other, it might suggest that “demand has remained strong while the supply of available units has shrunk”. “Immigration will reach or approach record levels over the next two years. The number of non-permanent residents, including students, will also increase. Many of them will turn, at least initially, to the rental market. Investor-owned condominiums will be a key source of rental supply in the area,” TRREB Chairman Kevin Crigger warned in the statement. “It is clear that rental demand is increasing relative to available units. While the home ownership market often grabs the headlines, policy makers should also be aware of the need for rental housing supply as we move forward.
The increase in rental costs seen so far in 2022 largely reflects rising real estate values.