Average rent for a Toronto apartment hits $2,500
Rents have gone up a whopping 30 per cent in just three years across the GTA, according to newly-released research from the Toronto-based market analysis firm Urbanation.
The bad news is that residents are now looking at an average of $2,515 per month — excluding utilities and parking — to live in a purpose-built rental apartment built after 2005.
The good news is that we may finally have hit a ceiling.
Urbanation reports in its Q3-2019 rental market results, released on Friday, that rents are up only 6.1 per cent, year over year, from $2,370 during the third quarter of 2018.
It may sound like a steep hike, but Urbanation notes that this increase actually represents the slowest rate of rent growth in two years.
"The results indicate that rent inflation has begun to moderate after a strong escalation in recent years that brought rents up by about 30 per cent compared to three years ago, suggesting that $2,500 per month may represent a near-term resistance level for GTA rental affordability," reads the report.
"As well, the 3,157 purpose-built rental units that completed construction in year-to-date 2019 was the highest level of new rental supplied delivered in 25 years, which has coincided with a rise in condominium apartment completions — many of which are used as rentals."
More choice for renters is helping to alleviate some of the tension on Toronto's apartment market, despite the fact that vacancy rates remain "exceptionally low" at just 0.8 per cent.
Urbanation's quarterly survey only collects market information for purpose-built rental apartment projects completed in the Greater Toronto Area since 2005, but with 68 buildings and 14,832 units in the mix, the results are a good indicator of where the rental market is at in general.
"Rental apartment completions are expected to remain consistent with their current 2019 pace over the next couple years, which should continue to help restrain rent increases alongside further growth in condo supply," reads the report.
That, and perhaps the fact that people simply can't pay more than $2,500 a month.
"The latest data suggests affordability constraints are impacting market growth for rentals," notes Urbanation President Shaun Hildebrand, "with renters seeking to save on costs by forming more multi-tenant households and substituting to smaller units and less expensive areas of the GTA."
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