Investors in rental homes in the Greater Toronto Area are seeing strong growth in rents as demand continues to outpace supply.
The Toronto Real Estate Board says that rents for a typical one-bedroom apartment gained 10.4% year-over-year in the second quarter of 2018 to $2,055. There were 4,879 of these homes rented in the quarter, down 2.9% year-over-year.
For a two-bedroom apartment, the average rent was $2,755, a rise of 8.8% year-over-year. There was a 1.2% rise in these rentals compared to a year earlier to a total 3,104.
"The demand for condominium apartment rentals remained strong compared to the number of units available for rent. Current market conditions point to the fact that renters have little choice when it comes to finding a place to live. Governments need to look at ways to increase the supply of rental accommodation, both in terms of purpose-built rental properties and individual investor-held units. This would go a long way to easing the pace of rent growth in the GTA," said TREB president Garry Bhaura.
The rent rises are bad news of course for renters, especially those trying to save a mortgage down payment.
TREB’s director of market analysis Jason Mercer says recent government policy changes including rent controls have not solved the problem of sharp-rising rents.
“New, investor-held condominium apartments entering the market have not been enough to provide the needed balance in the condo rental market. As a result, the strong competition between renters continues to sustain double-digit or near-double-digit annual average rent increases," he said.
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