Toronto saw a 20% increase in apartment rents, marking a record high level

Renters in Toronto are leaving the discounts zone they have been enjoying during COVID-19 lockdowns, as rents are fully offsetting pandemic losses and reaching record high levels.  

According to the recent report by Toronto Regional Real Estate Board (TRREB), 

an average monthly rent on newly-leased one-bedroom apartment in Canada’s biggest city was up by 20% from a year earlier to $2,269 in the second quarter. 

Two-bedroom units posted an annual increase of 15% to $2,979, and the cost of three-bedroom apartments went up by 13%. 

The double-digit price growth reflects a drop in the number of listings, which fell by 11% on year-over-year basis.

As you know, the pandemic caused a significant hike in apartments listed last year, as people were leaving the city centers. Today, as the COVID crisis weakens, some of them are coming back. In addition to it, higher interest rates will push many potential homebuyers out of the market and support the strong demand for rental units. 

“We expect the rental market conditions to get worse during the coming months,” – Kevin Crigger, TRREB’s president says. 

Meanwhile, homebuilding delays and cancellations, caused by growing construction costs, higher rates and labor shortages, are pushing rents higher. 

According to Benjamin Tal, deputy chief economist at CIBC Capital Markets, out of the 30,000 condo units that were supposed to be built in 2022, almost 10,000 were canceled or paused.