Renters in Toronto were shelling out $2,941 monthly for two-bedroom condo units during the third quarter of 2019. The average one-bedroom condo rent also crept further skyward, hitting $2,262 during the same period.
The new rental data, produced by the Toronto Real Estate Board (TREB), covers the Greater Toronto Area between July and September 2019.
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There was little good news in the data for the city’s beleaguered renters who have been struggling with seemingly endless increases in a drum tight market where they must fiercely compete against one another for accommodations. Piling on the gloom in a media release, TREB’s Chief Market Analyst Jason Mercer notes that the average annual rent increases are double the rate of inflation.
The TREB data follows an RBC report published last month on the state of Canada’s major rental markets. In the report, RBC economist Robert Hogue wrote that the situation in Toronto is particularly dire. The city has the worst rental supply deficit in the country and homebuilders aren’t even close to closing the gap.
To make matters worse, Hogue believes new government policies haven’t done nearly enough to incentivize builders to deliver the much needed units to the market. Unless significant changes are made, Toronto’s rental market will remain undersupplied for many years to come.
There are a couple of bright spots in the otherwise grim outlook.
TREB reports that rental condo listings grew at a faster rate compared to rental transactions in the third quarter versus the same period in 2018. In other words, the market appears to be on its way to a somewhat rosier supply and demand balance.
“The fact that rental condominium apartment listings grew at a faster year-over-year pace compared to rental transactions suggests that the rental market has become better-supplied over the past year,” says TREB President Michael Collins.
“Steady condominium apartment completions coupled with strong average rent growth have prompted many investor-owners to list their units for rent. If growth in rental listings continues to outstrip growth in rental transactions for a sustained period, we could see a more balanced market in the future,” Collins continues.
TREB’s Jason Mercer delivers a second piece of good news in the media release.
“[T]he pace of average rent growth has slowed noticeably over the past twelve months as we have seen an acceleration in listings. This suggests that renters are benefitting from more choice in the marketplace,” he says.
It’s not the most uplifting messaging so Toronto renters would be wise to temper their expectations for price relief. For those looking to make a quick exit, there’s always St. John’s, Newfoundland, where one-bedrooms go for an average of $810 monthly.