Renting a one-bedroom condo in the GTA will cost you nearly $2,000 a month
By Newinhomes on Jul 18, 2018
Leading Greater Toronto Area condo market consulting firm, Urbanation, recently released its condo rental figures for the second quarter of 2018.
President of New Home Buyers Network, Sam Reiss, recently wrote about different ways millennials are buying and affording new condos. Prices are high in the condo market, and it’s the same story in the rental market, only many of the strategies Sam highlights won’t apply in the rental game.
The average monthly rent increased 11.2% year-over-year to $2,302 (with an average unit size of 732 square feet). On a per square foot basis, rent in Q2-2018 averaged $3.14, which is an 8.7% increase and the first time it’s ever exceeded $3. In the City of Toronto, the average rent shot up 12.1% to $2,379.
The average monthly rent of a studio unit grew by 12% to $1,720, while a one-bedroom without a den increased by 13% to $1,968. Units sized one-bedroom+den and larger increased by anywhere from 6% to 10%, with larger units showing smaller year-over-year growth.
From Q2-2017 to Q2-2018, there were 25,955 leases reported through the MLS, the lowest 12-month total in three years. In the last year, only 7.8% of GTA condo units were in play in the rental market. Q2-2018 leases dropped 8%, the third consecutive quarterly drop, to 7,754.
The drop in leases isn’t that surprising when you consider new condo registrations dropped 28% to just 3,264 units in the second quarter of the year. Purpose-built rental construction surged up to 2,635 starts, bringing the total amount under construction to 11,073, the most we’ve seen in three decades. There are also many planned rentals in the works; 120 projects equalling 37,403 units!
As millennials struggle to enter the housing market, the rental market will be flooded with demand, potentially leading to low supply and even higher rents. If young professionals can’t afford to buy or rent, the GTA risks losing some talent to neighbouring regions.
If you’re looking for the most affordable condo rental, you’ll find it in Markham, where the average monthly rent in Q2-2018 was $1,870. The second most affordable area was Scarborough with an average rent of $1,939.
The ideal scenario is partnering up with someone in a one-bedroom. Even though the average rent for a one-bedroom+den was $2,113, when you split this in half it’s actually somewhat manageable. Splitting the average two-bedroom ($2,640 a month) also makes more sense than trying to afford a studio or one-bedroom on your own.
