Photo: James Bombales
Renters in the Toronto area haven’t had much to look forward to in recent years.
The city and its environs have routinely recorded some of the most expensive rents anywhere in the country, as supply has lagged demand.
Housing Market News Alerts
Sign up now for news alerts on the Canadian housing market
But a new report from Urbanation, a research firm which tracks the GTA’s condo and rental markets, offers a rare bit of encouragement for apartment hunters.
According to Urbanation’s second-quarter survey of purpose-built rental apartments (read: buildings with multiple units that were constructed for the purpose of renting), the GTA’s average vacancy rate climbed to 1.5 percent, compared to 0.3 percent over the same period in 2018.
The average vacancy rate hasn’t been so high since at least 2015, when Urbanation started its quarterly survey, which only includes buildings that have been completed since 2005.
In markets with higher vacancy rates, prospective tenants can gain more bargaining power — but those in Toronto shouldn’t get too excited despite the four-year high.
For starters, while rent growth slowed from the 10.3-percent year-over-year rate observed a year ago, increases were still substantial. Rents in the buildings surveyed still soared 7.6 annually in the second quarter.
The average monthly rent skyrocketed to an all-time high of $2,475, or $3.12 per square foot, at an average size of 794 square feet.
“The uptick in vacancy in the first half of 2019 from rock-bottom levels occurred as an increase in new supply created somewhat more choice for renters,” says Urbanation President Shaun Hildebrand in a statement.
In the past 12 months, nine new purpose-built rental buildings encompassing 3,078 units entered the occupancy phase.
“This trend will need to continue in order for there to be meaningful progress towards alleviating the tightness in rental market conditions in the GTA,” he adds.