The cost of renting a one-bedroom condominium in Toronto is now up more than 20 per cent year-over-year, as higher borrowing costs leave some would-be buyers on the sidelines.
The latest data from the Toronto Regional Real Estate Board shows that the average monthly cost for a one-bedroom condominium hit $2,481 in the third quarter of 2022, up from $2,269 last quarter and $2,061 in the third quarter of 2021.
The average rental cost for a two-bedroom condo was up 14.5 per cent year-over-year to $3,184.
Total listings, meanwhile, were down 25.6 per cent year-over-year.
Transactions were down as well but only by 17.3 per cent, pointing to a significant increase in competition for units.
“Immigration into the GTA plus non-permanent migration for school and temporary employment have all picked up markedly. Add to this the impact of higher borrowing costs on the ownership market and it becomes clear that the demand for rental housing remains strong for the foreseeable future,” TRREB President Kevin Crigger said in a press release accompanying the data. “Investor-owned condos have been an important component of the rental stock for more then a decade. However, the decline in rental listings over the past year are a further warning sign to policymakers that the overall lack of housing in the region extends to the rental market as well.”
The Bank of Canada has now raised interest rates six consecutive times so far in 2022, significantly increasing the cost of borrowing.
TRREB said that has, in turn, left some buyers on the sidelines and put further upward pressure on rent prices.
The data from TRREB reveals that the condo vacancy rate in Toronto now stands at 1.9 per cent after topping five per cent at one point during the COVID-19 pandemic.
The vacancy rates in other parts of the GTA range from 0.3 to 0.9 per cent.
“Rental housing is an increasingly important piece of the housing puzzle,” TRREB’s Chief Market Analyst Jason Mercer said in the press release. “While investor-owned condo units have been an important source of supply, current tight market conditions and double-digit average rent growth point to the need for additional purpose-built stock, the construction of which has been lacking in recent years.”
While the TRREB data only includes condominiums and not purpose-built rental apartments, a separate report by Rentals.ca and Bullpen Research & Consulting earlier this month suggested that the asking price for rent overall has risen 31 per cent over the last year in Toronto.