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Report: The Cost of a GTA Condo Rental Rose 12% in 2016

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The best time for investing in GTA pre-construction condo units is right now. With rental rates rising steadily over time, investors are receiving a better returns on their investments, at a quicker rate.

According to a recent report by Urbanation, the average condo rental in Toronto is rising very steadily. In their 2016 in review, it was found that the average condo rental in the GTA has risen nearly 12% to a total of $1,990 a month. In the next few months, that number should rise well above the $2,000 mark.

Here are a few other highlights from the Urbanation report:

  • The average index rent in the GTA rose to a record $2.77 PSF, an 11.7% annual increase.
  • The total of condo apartments leased through the MLS system during 2016 in the GTA declined by 2% to 26,602 units.
  • The average monthly rent rose to $1,990, a 7.2% annual increase.
  • The average Toronto rent averaged to be $2,134.
  • Least-to-listings ratio rose to 77%, a 3% increase since Q4, 2015.
  • The average unit size lowered to 710 square feet, from 748 square feet a year previous.
  • The number of purpose-built rental apartments are down 1,037 units from 2015.
  • Applications for purpose-built rental apartment development have increased by 7,586 units in a three-month span.

gta condo chart

Conditions affecting the rise in rental prices

In Q1, the average rent was $1,857 a month. Now it has risen $143 over the span of a year. In a recent blog post, we touched on some of the reasons behind the surging demand for condo rentals in Toronto. Here are a few reasons why rental prices are increasing.

Higher home prices

This can be partially attributed to homebuyers in the city finding it more difficult to afford their dream home in the Greater Toronto Area (GTA). Many ‘would-be’ homebuyers are now finding it more suitable to rent for longer than usual. With the higher demand of condo rentals in the GTA,  the average rental costs are seeing steady growth.

panda condos toronto

Panda Condos in Toronto

Low Supply and High Demand

There is also a lower supply of rental units that isn’t meeting demand. With the rising prices of available rental units, most renters are staying put with their current leases. To compound that fact, many investors are deciding to sell their units in order to take advantage of the 15% surge in the resale condo market. Additionally, purpose-built rental apartments have gone down. However, there was a recent increase in the amount of purpose-built rental apartment developments.

As we’ve mentioned in previous entries to our news section, there are many advantages to investing in Toronto’s condo market now. There are several opportunities out there waiting for you to unlock the highest ROI possible.

For more insider information on finding the best Toronto condos to invest in and highlighting trends affecting the condo market, become a TalkCondo Insider today.

 

Roy Bhandari