What’s Happening With Toronto Rent Prices?

Posted by Nicholas Searle ot 08:03 AM

TREB announced its rental market report for the end of 2017, based on leases reported by Greater Toronto REALTORS® through TREB’s MLS® System. The average rent for a one-bedroom condo was up by 10.9% from last year to $1,970! The average two-bedroom condo rent was up by 8.8% over the same period to $2,627. This may be an issue of supply and demand.

As the population in the GTA continues to grow, the demand for rental accommodation also rises. In the recent years, no matter how many new condos are being built it does not seem to keep up with the high demand. The city population is going to reach 7 million next year according to Statscan predictions.

Intense competition between tenants is taking place. We saw a number “bidding wars” for rental properties last year. Tenants are willing to pay higher rents than the listed rate to win the rental property. However, stronger candidates who have good employment history, income, credit score and references tend to have a higher chance in winning. About 100,000 new people come to the city each year, many of them are highly skilled professionals.

A low vacancy rate is one of the indicators to prove that demand is greater than supply. TREB said Toronto’s vacancy rate is 0.7%. TREB said Toronto's vacancy rate at below 1 per cent for condominium apartments, and that means every new listings translates into a new lease agreements signed. The GTA condo vacancy rate in York is 0.9%, 0.5% in Peel, 0.3% in Durham and 1.5% in Halton. Again, these numbers reflect a lack of inventory

Rent control legislation and the Ontario Fair Housing Plan will rule out more supply of both new buildings and the condos owned by investors. Under the new rent control restrictions, there are possibility that current owner/investors will choose to sell their properties over keeping them and renting them out to tenants. The new rules can help existing tenants, however the impact on new tenants is to be seen.



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