Renting in Toronto is a tiresome, frustrating process for most. Analyzing the latest Toronto rental data, evidently renting in the City does not seem like it’s going to get much easier in the months to come.
The Average Monthly Rent continues to Increase
The average monthly rent for a condo offered for lease is $2,200 per month, an increase of $220 since the same time last year. Subsequently, throughout the Toronto region, condo rents have increased approximately 10 percent in the third quarter compared to last year’s numbers. The average monthly one-bedroom rent is $1,839; the average monthly two-bedroom rent is $2,498; and the average monthly three-bedroom rent is $3,065.
Buyers are Staying in their Apartments Longer
Home buyers and investors who were once incentivized to continue trading up, selling and buying properties in the Toronto market, are being encouraged to stay in their condos longer. The real estate market is beginning to stabilize, arguably, however it is not yet clear to many people whether now is the right time to sell and/or buy. Due to the extension of rent control and a slow-down in the completion of condo building construction, would-be buyers are staying in their properties longer and there is lower tenant turnover than there has been in some time.
The Supply of Units is Falling
Though the total number of leases signed during the third quarter was flat, the supply of smaller apartments in particular are falling. The number of available one-bedroom units without dens fell by 11 percent and available studio apartment units fell by 3 percent.
This is attributable to many factors. Toronto has seen a surge in migration, home ownership has been declining since the spring resulting in more choosing to rent for the time being, tougher lending rules has made it more difficult to own a home in Toronto, and the government’s housing market policies publicized early in 2017 all play a role.
The Toronto Condo Vacancy Rate remains at roughly 1 Percent
Condos available to rent are hitting the market and being snatched up quite quickly. The average listing lasts 10 days, which is the briefest on-market period ever recorded in Toronto.
Despite calls to develop purpose-built rentals, including recently through a joint report from Ryerson City Building Institute and Evergreen, little is being done. The aforementioned joint report recommended the development of 8,000 purpose-built rentals to happen annually throughout Toronto. If done, this would return the Toronto region’s vacancy rate to a healthy 3 percent which is more than double where it’s at currently.
In the third quarter of 2017, there were proposals for 30,980 purpose-built rentals. Meanwhile, the number of rental apartments under construction increased to 6,146 within this time period. That is the highest level it has been in two years.
Of the rentals currently under construction, only 1,700 are expected to be occupied by year’s end.
What to Take Away from This if You’re a Renter in Toronto
Renting in Toronto has not been a simple thing to do for a long time and it probably never will be again. There are ongoing talks in how to develop more units, where to develop them, and how to make it more affordable for everyday Canadians to rent in Toronto.
In terms of what this means to someone searching for a rental today in Toronto, the best advice is to be ready. Get your documents in order, be prepared to apply for an apartment any time, and go the extra mile to secure a rental if you really like it. There are certainly great rental opportunities out there but it can take a lot of work to find them. So be patient, be prepared to close a deal today if need be, and continue searching units available every day.