Toronto’s apartment vacancy rate dropped to 3.1 per cent in the fourth quarter of 2021 as students and other residents moved back to the city amid easing pandemic restrictions, according to new data.
That is down from a high of 9 per cent reached in the first quarter of last year and represents the lowest vacancy rate since the early days of the pandemic when government restrictions shuttered businesses and postsecondary schools went virtual.
In the city’s surrounding areas, the apartment vacancy rate was 1.1 per cent in the fourth quarter of 2021, according to the report from condo industry group Urbanation Inc. This was similar to most of last year as the pandemic measures did not hit the suburbs as hard as the downtown core.
With demand increasing, landlords are forgoing incentives to attract new renters. Just under half of the rental buildings surveyed by Urbanation offered incentives in the last quarter of 2021, compared with 70 per cent a year earlier.
The secondary rental market, which is mostly condos owned by individual investors, has also been heating up over the latter half of last year. Across the Toronto region, the number of condo lease transactions climbed 24 per cent year over year to a record 47,737 units, according to the report.
That has increased rental prices to near prepandemic levels when the city of Toronto had an apartment vacancy rate of 1.1 per cent and the surrounding suburbs had a vacancy rate of 0.5 per cent.
In the last three months of 2021, the average monthly rent for a one-bedroom in the city was $2,140, up 14.5 per cent from $1,869 in the same period of 2020, although still below 2019′s average of $2,251, the Urbanation report said.
For the neighbouring regions, the average monthly rent for a one-bedroom was $2,041 at the end of 2021 compared with $1,854 in the previous year.
A prolonged period of low vacancy rates and unaffordable rental prices has led to a flurry of new development. Rental apartment and condo construction reached a record high in the Toronto region last year, accounting for 72 per cent of the city’s housing starts, according to Canada Mortgage and Housing Corp data.
Urbanation president Shaun Hildebrand expects condo rentals to continue to rise given the influx of new permanent residents and the fact that many Torontonians have no other option but to rent, as the average price of a Toronto home is above $1-million and unaffordable.
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