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It will come as no surprise to anyone who attempted to rent a condominium unit in Toronto during 2017 that there is an incredibly low vacancy rate in the city for these types of units, now hovering below 1% in the latest market report from the Toronto Real Estate Board (TREB). Conditions like year-over-year declines of 3.4% in new condominium listings and 0.7% in units leased contributed to a surge in rental rates in the fourth quarter of 2017. Average one-bedroom condominium apartment rents rose 10.9% on an annual basis to $1,970, while average rents for two-bedroom units jumped 8.8% to $2,627 in the same period.
“As the population in the GTA continues to grow, so too does the demand for rental accommodation," reads a prepared statement issued by TREB President Tim Syrianos. "The problem is that rental supply has not kept up with the increase in demand in recent years. The result has been low vacancy rates and intense competition between renters for available units. This competition has underpinned very strong growth in average rents,” said Mr. Syrianos.
Meanwhile, the condominium market fuelling this segment of the rental market took a hit in the fourth quarter of 2017, with the 5,773 recorded condominium sales marking a 15.4% decline when measured against Q4 of 2016. This slump in sales was accompanied by an increase in new listings over the same period, rising 9.8% to 8,186, though the market remained tight, recording a 70% sales-to-new listings ratio.
Price growth was one of the recurring narratives in real estate talk throughout 2017, and the trend continued into the fourth quarter. The average selling price for condominium apartments increased by 17.9% measured year-over-year, reaching $515,816.
“Demand for condominium apartments remained strong relative to listings in the fourth quarter. Even with the uptick in listings, which was certainly welcome, there was enough competition between buyers to prompt double-digit annual rates of price growth. This points to the fact that we still do have a supply problem in the GTA that needs to be addressed to ensure the long-term sustainability of the marketplace,” said Mr. Syrianos.
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