Tightening GTA rental market pushing condo rental prices

The Greater Toronto Area’s (GTA) rental market continues to tighten. In the first quarter of 2022, both the number of rental transactions and listings dropped year-over-year. However, rental listings dropped by a substantially greater amount. The lack of inventory clearly impacted the number of rental deals and led to tighter market conditions. More competition between renters led to marked annual increases in average rents.

The blip in the rental market during the onset of the pandemic was short-lived. The rental market is moving closer to the pre-pandemic peak. The cost to rent a one-bedroom condo is up by almost 20 per cent compared to the same quarter last year. For a two-bedroom unit, our latest rental market report highlights an average price of $2,867. This was also up by almost 20 per cent over the same quarter in 2021.

Immigration to soar

In the next two years, immigration is set to soar in the GTA. The number of non-permanent residents, including students, will also increase. Many of them will turn, at least initially, to the rental market. Plus, higher borrowing costs could prompt some young people to put their decision to purchase a home on hold which means demand for rental homes will remain strong.

Need more rental units

Investor-owned condos will be a key source of rental supply in the region. However, looking at the tight rental market conditions and increasing average rents, it’s clear that we need more rental units. Although the homeownership market often dominates headlines, it’s important not to lose sight of the rental market and the important role it plays in a rapidly growing region.

If you’re interested in digging deeper into the rental market, TRREB members offer prospective renters the property intelligence they need. They’re partners in property success, no matter if you are looking to rent or buy.

Stay up to date on the rental market with our quarterly Rental Market Report, which contains condo rental statistics for all GTA municipalities. Visit trreb.ca to explore the latest look into the housing market and search listings in real time on any device.