CMHC REPORT >>
The Heightened Demand for Rental What’s driving tight market conditions in the GTA Despite rising supply in both primary and secondary GTA rental markets, tight market conditions persist according to the latest rental market survey from CMHC.
D
riving the demand are millennials and newcomers to the city looking for temporary accommodations in favourable locales. Although some improved supply growth in the purpose-built rental market was achieved, the average apartment vacancy rate remained low at 1.5 per cent in 2019, up slightly from 1.2 per cent the previous year. High homeownership costs coupled with tightened mortgage regulations have encouraged individuals to continue to seek, or remain in, rental accommodations. House prices continue to recover following unprecedented levels back in 2017, but remain elevated relative to previous years. Furthermore, prices of multiple-family dwellings (such as condominium apartments and townhouses), which are typically more popular among first-time homebuyers, have showed stronger price growth than other housing types over the past 12 months, thus pushing demand towards the rental market. 10 | Canadian Apartment | Part of the REMI Network |
Average rents According to CMHC, these tight rental market conditions allowed landlords to charge new tenants higher rents, and in turn, average rent growth in the GTA significantly exceeded the provincial guideline of 1.8 per cent for 2019. The average rents for the matched two-bedroom units on a year-to-year basis have been growing at an increasing rate. While this growth is predominantly driven by tight rental market conditions, a rising number of renovations may have also put some upward pressure on the average rents of existing units. The number of newly completed purpose-built rentals (which typically charge higher rents) has also been increasing in recent years, which has contributed to the growth of average rents for the market as a whole. The turnover rate decreasing to 9.5 per cent in 2019 from 11.2 per cent in 2018 is indicative of existing renters remaining in their rental properties, likely influenced by the fact that recently the average
