A new report by Bullpen Research & Consulting and TorontoRentals.com found the average monthly rent in the GTA increased by 16.5 per cent year-over-year, from $1,998 in May 2021 to $2,327 in May 2022. But rents in May are still slightly below pre-pandemic costs. In May 2019, the average rental was $2,365.
“Investor-owned condominiums led the way, experiencing significant annual growth of 25 per cent from May of last year,” said Ben Myers, president of Bullpen Research & Consulting, in a statement.
“High demand for downtown rental properties, coupled with less supply due to rate hikes and delayed occupancies of new projects as a result of labour stoppages and supply chain issues are all contributing factors to the rent inflation.”
The surge in demand also stems from immigration, students, and recent graduates moving out of their parents’ homes, the report said.
In addition, fewer people tend to move during uncertain economic times, and more would-be first-time homebuyers are deciding to stay on the sidelines and in rental housing, drying up supply, the report added.
Jordan Rasberry, co-founder and broker of Core Assets Real Estate, said he expects the rapid rise in rents to continue until September and October and then level out.
“This huge surplus of active tenants will have secured places and then (we) will return to a more normal ebb and flow in the rental market,” he said.
In May, Toronto had the highest average monthly rent for condo and apartments rentals at $2,438 a month, an annual increase of 19.8 per cent.
Burlington and Etobicoke followed closely, with average monthly rents of $2,233 and $2,263 per month respectively. From May 2021 to May 2022 Burlington saw an increase of 18.3 per cent and Etobicoke 17 per cent.
Next in line for average monthly rent for condo and apartment rentals were: Mississauga at $2,224, up 12.9 per cent year over year; Oshawa at $1,807, up 12.4 per cent annually; York at $2,083, up 12.2 per cent; Oakville at $2,299, up 11.2 per cent; North York at $2,102, up 10.2 per cent and East York at $1,898, up 8 per cent.
Vaughan was the only city with an annual decline in average rent for condo and apartment rentals, seeing rates decrease by 6.6 per cent to $2,072 per month.
In Toronto, Cabbagetown was the only market where rents are lower this year compared to last for condo and apartment rentals, a change the report says is due to a shift in the average unit size of rental listings. Last year’s average unit size was 742 square feet, dropping to 586 this year, the report said.
The change in the rental market in May is a marked shift from the pre-pandemic market and is more competitive now, said Rasberry.
In 2019, the rental market peaked in August and September and began to decline leading up to the pandemic. Once the pandemic began in March, rental prices continued to decline, he said.
“That pre-pandemic period between October 2019 and March 2020 was a much more relaxed rental market. Most properties were not receiving multiple offers and the average number of days on market was much higher than it currently is. Most good properties in the downtown core that have flexible showing schedules are currently leasing out in one to four days,” Rasberry said.
“It’s a more frustrating time for potential tenants.”
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