GTA's secondary rental market stable in 2013

By Sonia Bell
November 06, 2014

According to the Rental Market Survey conducted by Canada Mortgage and Housing Corporation (CMHC), most of the secondary rental market was stable in 2013. The secondary rental market includes “all types of rented accommodation other than privately-initiated purpose-built rental apartments and townhouses in structures with at least three rented units.”

With all the new high-rises scattered throughout the GTA, it's no surprise that condominiums are the largest group within the secondary rental market. In 2013, there were more than 77,000 condo apartment rentals in the GTA. As supply in the primary rental market continues to decrease, condominiums are increasingly absorbing the growth in rental demand.

Secondary rental market

Rent on the rise

Rent for all types of secondary rental units increased in 2013. The average rent for a two-bedroom single detached home in the Toronto CMA was $1,351. Semi-detached, row and duplex also grew to $1,242. The average rent for other primary accessory suites grew to $1,072.

The average rent for condo units was up 9.5 per cent from 2012. The average cost for a two-bedroom condo rental in the Toronto CMA was $1,752. Central Toronto is the most expensive area, with the average rent of a two-bedroom condo being $2,115. Average rent for a two-bedroom condo unit in Scarborough (East Toronto) is $1,368, making it the most affordable area in the Toronto CMA.

secondary rental market

Vacancy rate for rental condo apartments

The vacancy rate for condo apartments increased to 1.8 per cent in October 2013. the highest it has been in more than 10 years. The report indicated that while demand for condo apartments was up 20 per cent, supply exceeded growth in demand in 2013

More and more, condo units are entering the rental market. 43 per cent of newly completed condominiums were added to the rental universe in 2013. Furthermore, a higher percentage of units, which had previously been occupied by the owner, became available for rent.

High Growth in Scarborough and Etobicoke

Some areas experienced more growth in the secondary rental market than others. Scarborough (Toronto East) and Etobicoke (Toronto West) have the strongest growth in condo rentals in the GTA. Supply in Scarborough was up 48 per cent, while demand was up 47 per cent. In Etobicoke, supply increased 58 per cent, but was outweighed by demand, which grew 59 per cent. Due to the increase in both supply and demand, vacancy rates remained the same in these areas.

On the other hand, North york and Peel had diminishing supply and demand for condo rentals. In North York, supply increased in the primary rental market, taking away some of the demand for condo apartment rentals. In the Peel area, more renters moved into ownership, putting a strain on rental demand,

Read the report

About Sonia Bell

Sonia Bell is a NextHome contributor. She has her masters in Communications studies and loves exploring all things real estate – from home décor trends to neighbourhood and market news.

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