Canada's Condominium Magazine
With the cost of condo ownershilp rising — and detached homes unaffordable for many — some prospective buyers have turned to rentals in the short term. Rent in Toronto, however, has escalated again, also on short supply. Future supply may eventually catch up to demand — with more purpose-built rental apartments undersway, and condo starts continuing to be relatively vigorous — but in the near term, rents are climbing. This might be good news for owners/investors; but clearly not good news for renters.
Average monthly rents in Canada’s biggest city surged 10.7 percent in the first quarter from a year earlier to C$2,206 ($1,751), according to Urbanation Inc. That’s the second-biggest increase since the firm started tracking the data in 2010, surpassed only by the 11.5 percent jump in the third quarter of last year.
The average annual income required to buy an average-priced resale condo in the Toronto region is now C$100,000, up from C$77,000 a year earlier, according to Urbanation.
“The situation should improve at least somewhat starting in the second half of the year as more condo projects under construction reach completion and buyers begin to adjust to the new mortgage rules,” Shaun Hildebrand, a senior vice president at Urbanation, said in a statement.
Leasing costs at properties purpose-built as rentals also jumped, climbing 16 percent from a year earlier for buildings completed since 2005, the biggest increase since Urbanation started tracking the apartment segment in 2015. While the stock of apartments the firm tracks is small compared with condos, their rents are catching up, according to Hildebrand.
“They were trailing behind in terms of rent growth,” he said by phone. Now, “rental operators are realizing that they’re able to increase their rates up to market levels that are much higher.”