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The Larger Toronto and Hamilton Space (GTHA) condominium rental market has skilled a major downturn, marked by the most important six-month lower in lease costs previously 15 years.
In accordance with actual property consulting agency Urbanation, the GTHA reached a peak rental fee of $4.20 per sq. foot within the third quarter of 2023, equal to $2,929 for a 698-square-foot condominium. Nevertheless, the market has since seen a 7.4 per cent decline in common condominium rents.
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The drop, probably the most substantial outdoors of the pandemic interval in late 2020 and early 2021, has resulted in a mean lease of $3.89 per sq. foot ($2,732 for 702 sq. ft) within the first quarter of 2024.
“Whereas the market stays costly with rents 15 per cent larger than two years in the past, renters ready for some reprieve out there have discovered it because of a brief provide infusion from condominium buyers. This isn’t anticipated to final lengthy, and rents ought to proceed rising as building falls in need of demand,” Urbanation president Shaun Hildebrand stated, in Wednesday’s quarterly report.
Regardless of this lower, year-over-year figures for the primary quarter of 2024 present a 1.6 per cent enhance in common condominium rents. Nevertheless, this progress is significantly slower in comparison with the 13.3 per cent annual enhance recorded in the identical quarter of 2023, representing the slowest tempo of lease progress in 9 years.
Urbanation stated one main issue contributing to the slowdown in worth progress is the inflow of newly accomplished condos into the rental market.
“Over the previous 4 quarters, a complete of 23,095 new condos have been registered, a 21 per cent enhance over the identical interval ending Q1-2023 (19,028) and the third highest four-quarter complete ever recorded,” Urbanation stated.
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The information collected by Urbanation additionally reveals a distinction in traits between condominium leases and purpose-built rental buildings.
Condominium buildings registered previously 4 quarters now account for a document 24 per cent of all condos listed for lease within the first quarter of 2024. The report additionally signifies a 37 per cent year-over-year enhance in condominium rental listings, leading to 5,078 energetic listings by quarter-end. This marks a 55 per cent quarter-over-quarter enhance and greater than doubles the two,516 items from the primary quarter of 2023.
In distinction, rents in purpose-built rental buildings constructed since 2003 have risen by 2.0 per cent quarterly and 4.5 per cent yearly, averaging $4.14 per sq. foot. Urbanation attributes this progress to a lower in new provide, with completions of purpose-built rental items dropping to 783 within the first quarter, down from a multi-decade excessive of 5,779 items in 2023.
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Urbanation’s findings nonetheless recommend a resurgence in purpose-built rental provide within the close to future. Building has surged to five,976 items previously 12 months, a rise of 174 per cent, pushing the complete stock of purpose-built leases beneath building to a multi-decade excessive of twenty-two,064 items by the top of Q1.
• E-mail: shcampbell@postmedia.com
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