Condo rents in Toronto have increased 6.8% year-over-year as vacancy rates fell to 0.5%, according to Urbanation.
“The rental market is benefitting from strengthening fundamentals such as employment and population growth, but also quickly eroding affordability and intense competition in the ownership market,” Shaun Hildebrand, Urbanation’s senior vice president, said. “Even with record numbers of condos coming up for rent by investors, conditions have tightened, supporting increased rental development.”
The number of condos rented through the MLS system in Q1 of this year increased by 25% year-over-year to 6,163 units.
That follows a record 2015 when 27,155 units were rented – a 19% year-over-year hike.
For the fourth quarter in a row, condo leases outgrew total listings. The ratio of lease-to-listings hit a Q1 record of 78% -- up from 64% a year ago.
The average time on market also fell from 27 days to 23 days.
And developers are taking note of the trend.
“After purpose-built construction starts increased to a 25-year high of 3,476 units in 2015, applications for new rental developments surged by 40% in the first three months of 2016,” Urbanation said in a release. “A total of 4,284 units was added to the total proposed inventory of 14,753 rentals across 42 projects in the GTA. Vacancy rates within the 7,309 purpose-built units completed since 2005 averaged 0.5%.”
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Investors in this market likely to enjoy even higher rents.