Toronto renters: Do you want the good news first, or the bad news?
Wednesday Nov 06th, 2019
Let's start with the good news since it's the freshest.
Toronto apartment rentals saw the slowest rate of price growth in the last two years during the third quarter of this year. Real estate research firm Urbanation, which tracks prices for purpose-built apartments in the region, released new data today that found the average price for a Greater Toronto Area rental apartment was "essentially unchanged" between July and August when compared to the April to May period.
The average rental cost at $2,515 is still painfully high for many in the region, and the vacancy rate, at 0.8% for purpose-built rentals, remains stubbornly low.
But despite that persistent, exceptionally low vacancy rate, rental price growth is moderating and that's a win for Toronto renters.
Urbanation released another bit of good news for Toronto beleaguered renters. According to the firm's latest data, there have been 3,157 purpose-built rental units completed so far this year, the highest figure in 25 years. It also comes at a time when condos - which are frequently used as rentals - are seeing a rise in completions.
So to sum this up, Toronto is seeing rental price growth moderate even though vacancy rates haven't improved. New supply is hitting the market which has added more choice for renters and alleviated some of the tension in the market.
It's also worth noting that the new supply was not counted in Urbanation's vacancy rate figure, so it's possible that the absurdly low rate has eased up a bit too.
All great right? Well, not entirely.
The bad news is that even though the city and surrounding region is seeing a significant uptick in rental unit construction and condo completions, it still isn't enough to counteract the effects of the already strained market and sustained increases in demand for rentals.
"Longer-term market imbalances indicate more action is required for rental projects to progress through the planning stage," the Urbanation press release reads, which essentially means the firm believes the city needs to see a ramp up in rental construction ASAP.
While the third quarter price moderation was encouraging, Toronto's rental market woes are a long-term problem that is nowhere close to having a similarly long-term solution in the works. And Urbanation is far from the only group of housing analysts who believe Toronto renters' struggles are going to remain very real in the coming years unless more supply hits the market.
Last month, RBC senior economist Robert Hogue wrote that Toronto has the worst rental supply deficit in the country.
"Rental apartment construction must rise (and soon) to bring lasting relief," he wrote, before outlining several policiy changes that the city and province could inititate to better address the dire situation.