Urbanation says that the average condo rents in the last three months of 2016 rose 11.7 per cent compared to a year earlier with renters paying almost $2,000. The pace of rent increases was a sharp contrast to the 4.2 per cent annual rise recorded a year earlier.
“The undersupply of rentals in the GTA continued to worsen throughout the year, causing rents to surge alongside home prices and further deteriorating housing affordability across the region” said Shaun Hildebrand, Urbanation’s Senior Vice President.
Supply of rental condos in the GTA has declined as owners have chosen to sell properties due to higher prices. It means that total rental listings fell 8 per cent with lease volumes down 4 per cent in the fourth quarter from a year earlier.
For the whole of 2016 there were 26,602 condo units rented through the MLS, down 2 per cent from a year earlier.
Applications for new purpose-built rental units increased by more than 7,500 in the fourth quarter but Hildebrand is concerned about the future.
“While less pressure on rent growth may arrive in 2017 due to a temporary rise in new apartment completions, it’s become clear that more attention needs to be paid to building rentals over the longer-term,” he added.
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Those hoping to become first-time buyers in the Greater Toronto Area are under increasing pressure as soaring rents make saving for a downpayment tougher.