Supply is finally catching up to demand for rental housing in Toronto, giving apartment hunters a better selection of pads to choose from than we’ve seen on the market since at least 2015.
If only that meant anything for the stabilization of rent prices.
Real estate consulting firm Urbanation, which has been tracking GTA market trends since 1981, revealed in a new report today that the average vacancy rate across the region has risen to 1.5 per cent.
That may sound low, and it is — “exceptionally low,” in fact, as Urbanation says in its Q2-2019 market report — but 1.5 per cent is leaps and bounds above the 0.3 per cent vacancy rate Toronto was experiencing during the same period last year.
The rental availability rate, which includes both vacant units and occupied units where a tenant has already given notice to vacate, was even higher during the second quarter of 2019 at 2.3 per cent, up from 1.4 per cent in the second quarter of 2018.
“Vacancy rates reached their highest level since Urbanation’s survey began in Q1-2015,” reads the research firm’s latest report. “Growth in purpose-built rents within buildings completed since 2005 remained strong in the second quarter at a year-over-year increase of 7.6 per cent for available units.”
The increase in available units hasn’t done much to cheapen rent prices, however.
Based on its survey of 66 purpose-built rental apartments completed since 2005, Urbanation found that rents are currently sitting at “a record high” average of $2,475.
The firm also reports that, while the number of purpose built rentals under construction in Toronto right now is down, the total inventory of planned units is up to a whopping 44,093.
Analysts surmise that this may have something to do with the Ontario government’s removal of rent control for new buildings.
“The uptick in vacancy in the first half of 2019 from rock-bottom levels occurred as an increase in new supply created somewhat more choice for renters,” says Urbanation president Shaun Hildebrand.
“This trend will need to continue in order for there to be meaningful progress towards alleviating the tightness in rental market conditions in the GTA.