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Condo Rental Rates Continue Their Upward Climb

Condo Rental Rates Continue their Upward Climb

Demand for and supply of rental condominium apartments continued to grow in the Greater Toronto Area during the third quarter of 2023, as did prices.

More than 14,400 condo apartments were leased through the Toronto Regional Real Estate Board’s MLS system, an increase of almost 8% compared to Q3 2022.

On the supply front, the number of units for rent was up by more than 22% over the same period.

The supply of units for rent has increased at a faster pace than rental transactions over the past year. Many investor-owned units have been listed for lease in response to very strong rent growth and, quite possibly, the actual or potential introduction of tighter regulations surrounding vacant units and short-term rentals.

But despite a better supplied market, competition between renters has remained strong enough to sustain above-inflation rent increases.

The average lease rate for a one-bedroom condo apartment in the third quarter was $2,633 — up 6.1% compared to Q2 2022. The average lease rate for a two-bedroom unit was $3,430, an increase of 7.8% over the same time period.

Strong population growth and high borrowing costs continued to drive demand for rental units. Would-be first-time buyers, who have seen affordability erode over the past year-and-a-half due to high mortgage rates, have remained in this market. Many new permanent and temporary residents have also turned to rentals for housing.

Renters can expect this trend to continue for the foreseeable future.