Condo rentals up 15% in 2014 to all-time high, rents steady amidst rising supply
The number of condo rentals through the MLS system during 2014 in the Greater Toronto Area managed to top 2013’s breakout year by growing 15 per cent to 22,765 units, according to Toronto condominium market research firm Urbanation. Fourth quarter volumes grew by 11 per cent, affirming a relatively slower rate of growth for the market in the second half of the year.
Demand and supply growth were aligned during the fourth quarter as condo rental transactions grew at a similar pace to listings, which increased 10 per cent year-over-year and held the ratio of leases-to-listings to a level consistent with previous fourth quarters at 66 per cent. Supply growth has seen some reprieve over the past six months as the number of new project registrations has scaled back.
Average condo apartment rents grew by one per cent year-over-year in Q4 to end 2014 at $2.39 per sq. ft. For the year as a whole, condo rents appreciated by an average of 0.8 per cent, a marked deceleration from the 4.1 per cent rate of growth recorded in 2013 and the 3.7 per cent increase in 2012. The absolute average monthly rent continued its downward trend on account of shrinking unit sizes, declining by 0.7 per cent annually in the fourth quarter to $1,816 – the fifth consecutive quarter of year-over-year declines. Over the past year, the average size of units rented has fallen by 1.5 per cent, or 12 sq. ft. to an average of 761 sq. ft. in Q4-2014.
“The condo rental market grew into its shoes in 2014. Demand proved strong enough to absorb the market’s greatest amount of new supply in history, while also revealing an equilibrium for rent levels,” says Shaun Hildebrand, Urbanation’s senior vice-president. “The rental market’s proven stability and consistent growth is encouraging as we remain in a scenario of high condo completions over the next couple years.”