It’s only getting more expensive to rent a condo in the GTA, according to a new report from condo research firm Urbanation.
The average condo rent in the region jumped 9.4 per cent year-over-year last quarter to an average of $3.26 per-square-foot, while the average unit sized fell from 744 to 731 square feet.
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“Rapid rent growth has persisted in the GTA for over two years now, making it very clear that much higher levels of supply are needed to create a balanced market environment,” says Shaun Hildebrand, president of Urbanation.
The rise in rent comes even as more supply makes it way onto the market. The number of condo lease transactions reached its highest third quarter level in three years, jumping 5 percent year-over-year to 8,186 units.
But the market remains “exceptionally tight” according to Hildebrand — the average time on the market for a unit slipped to just 11 days.
“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,” he says.
Purpose-built rental construction slowed last quarter, with just 826 starts in comparison to Q2-2018’s 1,635. But, the total inventory of purpose-built rentals under construction has moved up to 11,172 units, the highest level in more than 30 years and 56 percent higher than this time last year.
“The 60 purpose-built rental buildings completed since 2005 in the GTA averaged rents of $3.09 psf in Q3-2018 for available units, up 17 percent from a year ago, partly due to the completion of higher rent buildings over the past year,” reads the Urbanation release. “The availability rate within these buildings was 1.5 percent in Q3-2018, rising from a low of 0.9 percent in Q3-2017.”