There was an increase in purpose-built rental apartment completions in the first three months of 2019.<\/p>\n
Urbanation says that completions hit a 25-year high of 1,849 units, nearly five times greater than the quarterly average since Q1-2016 and represented significant growth considering only 13,520 units have been built since 2005.<\/p>\n
But for owners and investors, the increased supply meant weaker rent growth despite strong demand and low vacancy rate.<\/p>\n
Purpose-built rents for units available for lease during Q1, 2019 grew by 5% year-over-year on a same-building basis, slowing from a 9% annual pace at the end of last year in Q4-2018.<\/p>\n
As of Q1-2019, purpose-built rents in buildings completed since 2005 averaged $2,398, or $3.25 per square foot (psf) based on an average size of 738 sf.<\/p>\n
On a same-building basis, condominium rents grew by 7.7% psf in Q1-2019, compared to a 9.2% annual increase in Q4-2018. Monthly condominium rents for units leased during the first quarter averaged $2,376 ($3.28 psf) across the GTA, 7.8% higher than a year ago.<\/p>\n
Demand lags supply<\/strong> \u201cThe increase in rental completions in early 2019, which is coinciding with more condominium projects finishing construction, has shown that growth in new supply can have a direct impact on the rate of rent growth,\u201d said<\/p>\n Shaun Hildebrand, President of Urbanation<\/a>. \u201cThe challenge going forward will be keeping rental construction numbers rising to a level that meets growth in demand\u201d<\/p>\n A total of 42,841 purpose-built rental apartments were proposed for development but had not yet started construction as of Q1-2019, 20% higher than the total proposed inventory of 35,834 units as of Q1-2018 and nearly 50% higher than the 28,841 units proposed as of the end of Q1-2017.<\/p>\n Approximately 4,000 purpose-built rentals are projected to reach completion in the GTA in 2019 (a 26-year high), with 1,849 already occupying in Q1<\/p>\n See our latest rental market release:https:\/\/t.co\/Q2HprqTotW<\/a> pic.twitter.com\/Se4EEzUdlo<\/a><\/p>\n
\nThe volume of condominiums leased through MLS grew by 13% year-over-year in Q1-2019 to 6,005 units, but supply grew faster than demand pushing down the ratio of leases-to-listings to 73% \u2014 the lowest level in four years.<\/p>\n\n