Rent in Toronto just hit a new high. The average cost to rent a one-bedroom condo rose to $2,065 in the third quarter, according to a report from Urbanation released Thursday.
The report highlights strong growth in Q3 for Toronto’s condo rental market. Average monthly rents rose 7.6% year-over-year in the third quarter for condos leased through the Multiple Listings Service — from $2,216 to $2,385.
“Rapid rent growth has persisted in the GTA for over two years now,” Shaun Hildebrand, President of Urbanation, told the Toronto Star, “making it very clear that much higher levels of supply are needed to create a balanced market environment. While increasing condo completions should begin to have at least some calming effect on rent increases next year, more upward momentum in purpose-rental construction is required to meet overall demand.”
The volume of units that are leasing for below $1,800 a month has basically dropped off almost completely — a 65 per cent decline year over year
One-bedrooms weren’t the only units affected. Toronto condo rents have risen across the board for studios, two-bedrooms, and three-bedrooms. In the third quarter of this year, the average rent for a studio jumped 9%, to $1,823. Two-bedrooms saw a 10% hike, to $2,720. And three-bedrooms rose 7%, to $3,691.
“The volume of units that are leasing for below $1,800 a month has basically dropped off almost completely — a 65 per cent decline year over year,’’ Hildebrand told the Star.
Ontario is the country’s fourth most expensive province to rent in, according to 2018 data from the Canadian Rental Housing Index (CRHI). Pricier than it, in ascending order, are British Columbia, Northwest Territories, and Alberta.
How does Toronto stack up against other Canadian cities? According to the Canada Mortgage and Housing Corporation, the average cost to rent a one-bedroom apartment in Calgary last year was $1,025. In Vancouver, it was $1,223.
Renter households make up 32% of Canadian households, according to the CRHI.
There may be some good news in sight, though. Hildebrand told the Toronto Star that he expects rent increases to slow in 2019, as more apartments and condos hit the market.
Hildebrand also told the Star that purpose-built rentals, which tend to be larger than condos, could help halt the rate of rent growth, but the slowing won’t be enough to lower prices.
For now, demand will continue to outweigh supply, thanks to a burgeoning population and an increase in buyers who are finding themselves locked out of the housing market. These factors will, the Toronto Star reported, “continue to outstrip the supply for rentals and push up the cost of leasing.”