Average rent for one-bedroom condo up by 20% from 2021: Toronto real estate board

The cost to rent a condo or an apartment in Toronto continues to soar, according to latest data released by the Toronto Regional Real Estate Board (TRREB) on Thursday.

TRREB said the average cost for a one-bedroom condo was up by 20.4 per cent to $2,481 between the third quarter of 2022 and the same period in 2021.

The average rent for a two-bedroom apartment rent jumped by 14.5 per cent to $3,184, compared to the same period in 2021. The rent for a three-bedroom rose by 10.9 per cent to $4,139 while the rent for bachelor unit increased by 21.3 per cent to $2,057.

TRREB attributes the price increase to would-be first-time homebuyers putting off real estate purchases due to higher interest rates. With a high demand for condo rentals amid a falling supply, competition has intensified and driven up the cost to rent.

“Immigration into the GTA plus non-permanent migration for school and temporary employment have all picked up markedly. Add to this the impact of higher borrowing costs on the ownership market and it becomes clear that the demand for rental housing remains strong for the foreseeable future,” said TRREB president Kevin Crigger.

The Bank of Canada emphasized in its latest interest rate announcement that rates will need to rise further due to inflationary pressures. The central bank raised its key rate for the sixth time on Thursday, to 3.75 per cent.

“Given elevated inflation and inflation expectations, as well as ongoing demand pressures in the economy, the Governing Council expects that the policy interest rate will need to rise further,” the central bank said.

As well, adding to the price pressures, there were 13,366 condo rental transactions recorded in the third quarter, a drop of 17.3 per cent compared to the same quarter last year.

“The decline in rental listings over the past year are a further warning sign to policymakers that the overall lack of housing in the region extends to the rental market as well,” Crigger said.

Related: Ontario rental market laden with discrimination, systemic racism: report

In an effort to tackle the lack of housing in the city, recently re-elected Mayor John Tory said he will be pushing forward to build more housing, adding he will use his new ‘strong mayor’ powers to do so if needed.

At his first news conference since being re-elected for a third term, Tory announced a plan to reorganize and create a new development and growth division for housing.

“We’re in a housing crisis in Canada. And that is being felt acutely in Toronto,” Tory said. “We can do (things) much faster so that we can get built the housing that we need, including more affordable housing.”

Back in the summer, the Ford government approved the highest rent increases in almost a decade. Rents will be capped at a maximum 2.5 per cent in 2023, which is more than double the increase in 2022. However, the province said the increase is lower than it could have been given current inflation rates.

With files from John Marchesan and Michael Ranger of CityNews