Toronto Rental Rates Soar. Most Expensive City To Rent In Canada.


Toronto Rental Rates Soar. Most Expensive City To Rent In Canada.

Toronto rental rates are on the rise, surpassing Vancouver as the most expensive city to rent in Canada. New condominium developments have been going up around the city but so have the prices, making finding a home ever-more difficult.

According to the January 2018 Canadian Rent Report by Padmapper, a rental data website, a one-bedroom rental unit “officially outpaced Vancouver’s to become the most expensive in the nation, growing 2.5 percent to $2,020. Two bedroom prices also saw a jump, 2.4 percent to $2,520. Vancouver remains in a close second with one bedroom settling at $2,000.”

Photo Source: Unsplash / Chuttersnap

Urbanation released its Q4 2017 rental results on the Toronto condominium market a few weeks ago which saw monthly rents increase by 9.1 percent year-over-year, while the number of available listings dropped 16 percent. According to the release, due to “high rent levels and new rent control regulations,” tenants are moving less often resulting in a tighter supply.  With fewer options and higher prices, renters are finding themselves moving to the outskirts of Toronto to find a place they can afford. “With rent levels rising downtown and more condo projects finishing construction in the suburbs – and those units being offered for rent—we are starting to see some tenants looking at alternative options and starting to migrate into the 905 region where rents are quite a bit less expensive,” stated Senior Vice President of Urbanation, Shawn Hildebrand. By his math, Hildebrand expects to see another 4-5% increase in rent throughout 2018. Hildebrand also stated the increase in demand will likely lead to more condo developments in the future, in order to meet housing needs for the GTA.

Photo Source: Unsplash  / Dawson Lovell

Due to population growth and low supply, Toronto condo vacancy levels are sitting at record lows, currently below 1 percent.According to The Toronto Real Estate Board Q4 2017 Rental Report, the number of condo listings during the fourth quarter was down by 3.4 percent compared to the year prior. The number of leased units also fell 0.7 percent. Despite Toronto’s population growing faster than the national average (according to the last 2016 census), if net rental availability continues to trend lower, residents will likely continue to face climbing rental prices.

New tenant protections came into effect in 2017, which, has made it more difficult for landlords to evict a tenant for the purpose of occupying the unit themselves or for a family member.  Going forward, a landlord must pay one-month’s rent to the evicted tenant, if they plan to occupy the unit. The landlord is also expected to occupy the unit for at least one year, to prevent landlords from listing the unit on AirBnB or re-renting at a higher rate. According to a Globe and Mail study, from 2013 to 2017, eviction disputes relating to owners intending to occupy the residence rose 23 percent, while disputes over rent hikes increased over 200 percent. While the new rules help tenants, the knock on effect is that being a landlord has become much less attractive and may result in more units coming off the market.

Photo Source: Unsplash  / Chuttersnap

According to Jason Mercer, TREB’s Director of Market Analysis, the new rent control legislation is negatively contributing to the overall rental market. With rental owners unable to increase rental costs beyond 1.8% because of the recent legislation, owners are increasingly inclined to sell their units, therefore putting additional stress on the already low supply of rental units. “It is possible that current owners of condominium apartments could choose to list their units for sale to take advantage of recent price gains rather than rent their units to tenants under the new rent control regime,” states Mercer.

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