As the housing market continues to show signs of weakening, the cost of renting in Toronto is on the rise.
New data released by the Toronto Regional Real Estate Board for the second quarter of 2022 shows that the average rent charged for one- and two-bedroom co-ops has already hit a new record after collapsing earlier during the pandemic COVID-19.
The median rent for a one-bedroom rose 20.2% year over year to $2,269 per month, while the median rent for a two-bedroom rose 15.3% to $2,979.
Smaller bachelor units rose a staggering 25% to $1,829 per month, but still haven’t reached the peak reached in the third quarter of 2019.
“Expect rental market conditions to tighten further in the coming months. Higher borrowing costs may have temporarily put a damper on home buying for some households, but the Greater Toronto Area (GTA) population continues to grow alongside a booming regional economy. That means an increasing number of people who need a place to live will head into the rental market,” TRREB President Kevin Krieger warned in a news release accompanying the data.
The GTA’s median home price has now fallen for four straight months, and at least one major bank is warning of a “historic” housing correction that could eventually see prices fall as much as 14% from peak to trough.
However, the rental market shows no signs of slowing down.
The latest data from the TRREB shows that rental listings fell 30 percent year-over-year in the second quarter, leading to a significant increase in competition for some units.
The GTA co-op vacancy rate also remains extremely low. In Toronto, about 1.9 percent of apartments are vacant, while the vacancy rate in other GTA communities ranges from 0.3 to 0.9 percent.
“Competition among tenants continues to heat up, putting extremely high pressure on average rents,” TRREB Chief Market Analyst Jason Mercer said in the release. “Rental supply remains a major issue in the GTA and will become more pronounced in the near term as an increasing share of well-employed individuals turn to the rental market.”
The TRREB says the median sales price for condominiums in the second quarter reached $769,999, up more than 12 percent from the same period in 2021.
However, the pace of growth has begun to slow amid the Bank of Canada’s aggressive rate hike campaign. Prices rose more than 16 percent year over year in the first quarter.
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