Photo: James Bombales
Amid worries about the worsening affordability in the Toronto rental market, the Ontario government implemented new rent control regulation in April. But according to new data, rent in the city has only gotten pricier.
A new report from the Toronto Real Estate Board has found that the average rent for a one-bedroom condo GTA condo went up 10.9 per cent year-over-year to $1,970 in Q4 of 2017. The cost of a two-bedroom condo shot up 8.8 per cent to $2,627.
“As the population in the GTA continues to grow, so too does the demand for rental accomodation,” writes TREB president Tim Syrianos, in a statement. “The problem is that rental supply has not kept up with the increase in demand in recent years. The result has been low vacancy rates and intense competition between renters for available units. This competition has underpinned very strong growth in average rents.”
That lack of supply is reflected in the number of condo apartments listed in Q4 2017, which was down 3.4 per cent year-over-year.
According to TREB director of market analysis Jason Mercer, rent control is making the situation worse, not better.
“Looking forward, we continue to have concerns that rent control legislation announced in conjunction with the Ontario Fair Housing Plan will preclude additional rental supply coming on stream, both in the purpose built and investor-held condominium apartment segments,” he writes in a statement.
The worry is that, since condo owners are unable to charge higher rents, they might be more likely to sell, further decreasing the city’s worryingly low supply of rental units.
“It is possible that current owners…could choose to list their units for sale to take advantage or recent price gains rather than rent their units to tenants under the new rent control regime,” writes Mercer.
Urbanation senior VP Shaun Hildebrand agrees that high prices have led more condo owners to sell. But in a recent report, he writes that the high demand has caused developers to add more supply to the pipeline.
“[Demand fundamentals for renting far outweighing supply] has raised the confidence of developers to add more units to the pipeline,” he writes. “A trend that will need to continue in order to meet future housing needs for the GTA.”