TORONTO — A report by real estate market research firm Urbanation Inc. says rents in the Greater Toronto Area are rising fast, echoing the latest numbers from online rental platforms about other major Canadian cities.
The Urbanation report says that dropping vacancy rates in Toronto in the second quarter have pushed up the average rent to $2,533 with a record high of $3.57 per square foot, up 5.9 per cent in the second quarter compared with the first.
It says annual rent growth reached 16.7 per cent as the vacancy rate has dropped to 1.4 per cent from 5.1 per cent a year ago.
A similar story is playing out in other Canadian cities as people return to major centes for work, international students return and more people put off buying a home because of uncertainty in the market and the economy.
The report for June from Rentals.ca found that average rents in Canada were up 9.5 per cent from a year earlier, while Vancouver had a 24.7 per cent jump from a year earlier and Calgary saw a 26.1 per cent increase.
Other cities have seen more moderate increases, including a 5.4 per cent year-over-year climb for Montreal and a 3.6 per cent increase for Edmonton, while it notes Canada-wide the average rent of $1,885 for June is still 3.5 per cent lower than in 2019.
The Urbanation data found that while prices for studio apartments were still about one per cent below pre-pandemic rates, while one-bedroom apartments with a den have seen prices up 6.4 per cent compared with 2019 and two-bedroom-plus-den rentals are up 9.4 per cent.
It also noted that there was almost no rental buildings that went into construction in the second quarter with only 87 rental starts compared with an average of 1,916 in the preceding four quarters, though total rental construction at 18,976 units is still at multi-decade highs.
Urbanation president Shaun Hildebrand said in the report that the drop in construction could be partly attributed to data volatility, but is also likely impacted by fast-rising construction, development and borrowing costs and approval delays.
“With housing affordability at generational lows and continuing to deteriorate, it’s concerning to see rental demand and supply deviate so strongly,” said Hildebrand.
This report by The Canadian Press was first published July 19, 2022.
