The average list price for a one-bedroom apartment in Toronto rose by more than six per cent in September as prospective tenants continued to face a sustained increase in rents, a new report suggests.
The report, prepared by Rentals.ca and Bullpen Research & Consulting, indicates that the average monthly asking price for a one-bedroom unit in Toronto reached $2,474 in September while the asking price for two-bedroom units hit $3,361.
Asking prices for one-bedroom rentals in the city have now shot up 27.5 per cent year-over-year, after bottoming out earlier in the COVID-19 pandemic.
Two-bedroom apartments are up 27.7 per cent year-over-year but saw a more modest 2.9 per cent month-over-month increase in September.
In a news release, Bullpen Research & Consulting President Ben Myers said that part of the increase “is attributable to larger units on the market, and high-end building completions adding expensive listings.”
But he said that an increase in demand is also pushing rents higher, even as the housing market undergoes a significant correction.
“Rental demand has increased significantly with the continued interest rate hikes, falling ownership house prices, and changing post-pandemic preferences,” he said.
Rent prices in Toronto declined by 11 per cent annually in May 2021 and six per cent annually in May 2020 as many people left the city in search of more space during the COVID-19 pandemic.
But asking prices have been rising steadily in recent months, particularly in urban centres.
The latest data released by Rentals.ca and Bullpen Research & Consulting suggests that the average asking price across all rental types in Canada last month was up more than 15 per cent year-over year.
Vancouver had the highest average rent price at $3,225 per month, followed by Toronto at $2,855.
The average rent across Ontario was up 18.4 per cent year-over-year to $2,451 per month.
Looking specifically at condominiums, the average rental asking price in Toronto was $2,988 in September. It had previously dropped to a recent low of $2,053 in February, 2021.
“Many of the same factors that have been affecting rental demand are still influencing the market in September. Interest rate increases are damaging ownership affordability and keeping prospective buyers in the rental market. Secondly, a softening ownership market, with forecasts for further declines are keeping prospective buyers on the sidelines, waiting for the market to bottom out,” the report states.
While the demand for rentals is expected to remain elevated, the report does point out that the page views per listing in September declined for the first time in months.
The authors also noted that the rental market is seasonal, with demand often higher in the fall.
