Renting a condo in Toronto keeps getting more expensive.
The average monthly rent for a condo in the city jumped 7.6 percent in the third quarter from a year ago to a record high $2,385, according to Urbanation Inc. While the number of new condo rental leases signed grew slightly in the third quarter from last year to 8,186, the market still remains exceptionally tight. Average lease prices in purpose-built rental buildings completed since 2005 in Toronto surged 17 percent to $3.09 per square foot as higher-rent properties were completed in the past year.
Toronto’s rental market continues to tighten as demand for housing in the city soars from millennials, downsizing baby boomers and an influx of new tech and financial-services workers. At the same time, high home prices and new government regulations have also priced out many buyers, pushing them into the rental market.
“Rapid rent growth has persisted in the Greater Toronto Area for over two years now, making it very clear that much higher levels of supply are needed to create a balanced market environment,” Shaun Hildebrand, president of Urbanation, said in a statement. “While increasing condo completions should begin to have at least some calming effect on rent increases next year, more upward momentum in purpose-rental construction is required to meet overall demand.”
The total inventory of purpose-built rentals coming under construction rose to 11,172 units, according to Urbanation, a real estate consulting firm that specializes in the condo market. That’s the highest level in more than 30 years and 56 percent more than last year. Just 60 such buildings have been completed since 2005.
At the same time, construction starts of rental buildings slowed to 826 units in the third quarter, dropping from a recent high of 2,635 starts in the second quarter.