It’s not great news for rental clients considering the move into Toronto’s condo market as a new report states that increasing market supply and competition is putting pressure on rental rates.
However, the decreasing size of units is also impacting on rental rates with the average size not at a record low of 755 sq. ft.
According to Urbanation Inc., the number of condo apartments rented through the MLS system in the GTA grew by 26 per cent (6,708 units) in the second quarter of this year compared to 2013.
Listings also reached a record (9,069 units) and for the fifth consecutive quarter, outpaced the growth in rental transactions by rising 29 per cent year-over-year.
“A surge of new supply from recently registered buildings kept rents in check during the quarter. Although listings are expected to remain strong as more units complete construction, rental demand shows no signs of abating, which should keep rents steady” said Shaun Hildebrand, Urbanation’s Senior Vice President.
The average rent per sq. ft. is now $2.37 in the GTA, marking the second straight quarter that rents grew by less than one percent, following an average rate of four per cent in 2013.
The average unit size rented decreased by 3.8 per cent, or 30 sq. as recorded in the second quarter of 2013. This led to a nearly equivalent decline in average monthly rent levels to $1,787 (-3.2% year-over-year). Declining unit sizes have pushed monthly rents down over the past three quarters.
Of the 5,973 units registered during the quarter, 18 per cent were rented through the MLS system. The average rent for these new units was $2.37 per sq. ft., or $1,521 at an average unit size of 638 sf.
A huge surge in the number of condos coming through the MLS and greater competition is squeezing rental rates in the Greater Toronto Area.