The number of condo rentals through the MLS system during the third quarter in the GTA fell nine per cent year-over-year to 7,651 units, Urbanation reports in its third quarter 2016 rental report released today. Activity was held back by a 13-per-cent drop in listings as the number of condo rentals in new projects registered dropped 30 per cent compared to Q3 of 2015. The ratio of leases-to-listings hit a new high of 89 per cent, while available listings at the end of the quarter fell to a five-year low of 930 units.
Market conditions tightened up with the average condo rental spending only 12 days on the market, and the number of units renting above asking price more than doubling from this time last year, to $2.71 per sq. ft. or $1,986 per month.
“The rental market has become severely undersupplied, which is likely to worsen following the latest round of mortgage insurance rule changes” says Shaun Hildebrand, Urbanation’s senior vice-president. “Notably higher qualification standards for first-time buyers and reduced credit availability for investors should put even more pressure on the market, even as more rental units are being built.”
Condo rental market
Average monthly rents surpassed $2,000 level in the City of Toronto for the first time, reaching $2,044 in Q3-2016 based on an average unit size of 717 sq. ft. at $2.85 per sq. ft. In Toronto proper, average rents shot up 10 per cent year-over-year to $3.10 per sq. ft., or $2,145. Growth was nearly as strong in the 905 region where rents increased by seven per cent from last year to $1,749, or $2.14 per sq. ft.
Urbanation’s survey of purpose-built rental apartment projects completed across the GTA since 2005 (46 buildings totaling 8,293 units) revealed a vacancy rate of just 0.6 per cent, unchanged from a year earlier. Rents across the sample averaged $2.45 per sq. ft., up five per cent annually. The inventory of purpose-built projects under construction totaled 25 buildings and 5,678 units in Q3-2016, down 676 units from the previous quarter as four projects began occupancy. The total proposed inventory increased to 20,226 units, double the level from a year ago.