The GTHA saw rental rates decrease and vacancy increase in new purpose-built rental projects during Q4 2022, reports Zonda Urban.
By the time 2022 came to a close, overall vacancy was at 5.8 percent for the region, and rental rates clocked in at $4.04 per square foot (PSF) – down 0.8 percent from Q3 2022. Downtown Toronto was a little more expensive, with rental projects in the downtown core reaching an average rate of $4.55 PSF.
According to Zonda Urban, the decrease in rental rates and increased vacancy levels are mostly due to seasonality, as Q4 has consistently experienced increased vacancy rates compared to Q3 since 2019.
However, when days on the market drastically increase while prices remain relatively flat, that usually signals a drop in demand for rental units that hasn’t been accommodated for with lower prices.
Studio units, 2-bedroom and 3-bedroom units had the largest hike in average days on the market compared to last quarter – unsurprisingly, considering the average lease price for each type of unit was $2,060, $2,934 and $3,713 per month respectively.
Three-bedroom + den units only spent 40% more time on the market in Q4, but still remain the slowest-moving unit type at an average of over 25 days on the market.
