According to the Rental Market Survey conducted by Canada Mortgage and Housing Corporation (CMHC), GTA rental rates for purpose-built private apartments was up 3.1 per cent from 2012.
Key reasons for the increase in GTA rental rates
The increase in rental rates essentially boils down to supply and demand. High demand results in high costs and, according to the report, demand for rental accommodations was up in 2013. There are a number of notable factors that contributed to the increase in demand. Firstly, the average level of employment for those in the 15-24 age group grew to 10.3 per cent. Consequently, this age group now has the means to move out on their own. Additionally, renting is increasingly becoming a more feasible avenue due to high housing costs.
On the flip side, supply in the primary rental market, which comprises of purpose-built apartment and row rental structures with at least three units, was down in 2013. So, while demand for rental accommodations continues to increase in the GTA, the purpose-built rental universe continues to shrink. Although new apartments were added to supply, the rental market universe was down approximately 600 units from 2012. The city of Toronto experienced a decline in apartments, while Peel and the Durham Region had a decrease in row rental supply.
Another noteworthy cause for diminishing supply is the tendency of baby boomers. Renters in the 45-74 age bracket typically continue to rent. As the largest and fastest growing population in the GTA, this has a direct affect on the number of available units. Moreover, as housing costs continue to rise, less renters entered the ownership market in 2013, which also resulted in less available units.
Highest and Lowest priced cities
The City of Toronto is home to the most expensive apartments in the GTA. The average cost for a two bedroom unit was $1,521 in October 2013, as opposed to $1,490 in October 2012. This average was skewed due to high costs in Central Toronto, with the average cost of a two bedroom apartment being $1,700. The Bradford and West Gwillimbury zone is the number one most affordable area with the average cost for a two-bedroom apartment being $1,009.