Cost of renting a condo in Toronto is approaching pre-pandemic peak, report finds

Average GTA rent for condos is approaching its pre-pandemic peak as demand returns while supply falls, according to a Thursday report from the Toronto Regional Real Estate Board.

Average rent for both one- and two-bedroom Toronto condo apartments climbed more than 17 per cent in the last year, the report found. Jason Mercer, TRREB chief market analyst, told the Star he anticipates rental costs will overtake their previous peak sometime in the next year.

Pre-pandemic, average rents peaked in summer 2019, according to the report. A one-bedroom condo in Toronto went for $2,226 then, and the average two-bedroom went for $2,941.

This fell sharply during the pandemic. Demand dried as downtown residents were no longer required to show up to work or school in-person, and could instead move to cheaper locales. The pandemic also closed borders, effectively halting tourism and immigration for a time, both rental market boons.

By late winter 2021, in the year’s first quarter, average rent in Toronto slid to $1,820 for a one-bedroom apartment and $2,446 for two-bedrooms.

Now, a Toronto one-bedroom condo apartment is going for $2,145 on average. Two-bedrooms are up to an average of $2,867.

Supply dropped by more than 23 per cent in the last year, according to the report. In early 2021, GTA realtors reported 13,162 apartment rentals through MLS. The same time this year, there were 10,110.

In its report, TRREB forecasts an increase in immigration and arrival of non-permanent residents, such as students, in coming years.

“As we continue to see population growth, there’s going to be continued demand,” Mercer said. “But we haven’t seen the supply of housing keep up.”

Supply spiked during the pandemic, in part because short-term rentals, such as Airbnbs, became less profitable as tourism waned and owners began listing them as traditional rentals, Mercer said.

Now, with short-term rentals becoming viable again — and condo valuations rising, leading some landlords to sell their property, rather than lease it out — rental supply is back down. That’s why it’s important, Mercer said, for more rental housing to be built.

Mercer said it’s possible average Toronto rent will return to its 2019 peak this year. “If not, we’ll certainly reach that threshold in 2023,” he said.