New rent control rules have gone into effect in Ontario, but the price to rent a condo in Toronto continues to rapidly climb, says a new Urbanation study.
Urbanation’s Q3 2017 report on the Toronto condo market suggests that there’s not much relief in sight for condo renters. The average rent jumped 10.3% year-over-year, bringing it to $2,219 for the average 743 square foot unit. Despite growing prices, rental activity remains stable thanks to high demand. According to the report, there were 7,761 new leases signed during the quarter.
Housing affordability continues to plague Toronto. Bidding wars are no longer restricted to purchased properties — even tiny condo units for rent often see multiple offers. And according to Urbanation, it will get worse before it gets better.
“The intense competition between renters in Toronto shows no signs of letting up in the near future,” said Shaun Hildebrand, Urbanation’s senior vice president.
Condos spent an average 10 days listed for rent in the third quarter — the shortest amount of time on record. The ratio of leases-to-listings is also at an all-time high, at 88%. At the end of the quarter, the city only had two weeks of supply. This data leads Urbanation to conclude that vacancy rates in Toronto have been in decline over the past year.
Ontario’s Fair Housing Plan, which included expanded rent control laws to cover all rental units, was criticized at the time of its introduction by housing experts who argued that rents will only get higher for everyone, because landlords would jack up rates before the law comes into effect and because development of purpose-built rental buildings would fall.
It seems like both of those predictions are now coming true as prices have indeed spiked and as many as 1,000 planned rental units have been converted to condos in the wake of the new rules.
The only viable solution it seems is to increase supply, Hildebrand concludes, as there’s little chance of lowering demand in a world-class urban centre like Toronto.