Toronto, August 2024 – For the first time in three years, condo rents in the Greater Toronto and Hamilton Area (GTHA) have experienced a decline. According to a recent report by a local company, average condo rents on new leases fell approximately by 1.2% in the second quarter of 2024 compared to the same period last year.
A Closer Look at the Numbers
The report highlights that the average rent for a condo in the GTHA now stands at $3.97 per square foot, or approximately $2,723 for a 686-square-foot apartment. This is a slight decrease from $4.02 per square foot during the same time last year. This marks the first decline in condo rents since 2021
Factors Behind the Decline
This slight pullback in rents can be attributed to a spike in recent condo completions. The increased supply of condos has temporarily eased the pressure on rental prices. However, it is still feared that this trend may not last long, as new condo sales have also started to drop off substantially.
Impact on Purpose-Built Rentals
While condo rents have seen a decline, purpose-built rental apartments completed since 2000 have experienced a different trend. Rents for these units rose by 2.2% from last year, averaging $4.08 per square foot. This includes a 0.5% dip in Toronto rents and a significant 7.7% increase in the wider region.
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Future Outlook
The report suggests that the current softening in condo rents might be temporary. With rental apartment construction starting up by 43% from last year and purpose-built rental apartment vacancies climbing from 1.6% to 2.7% in the second quarter of 2024, the rental market dynamics are poised for further changes.
As the GTHA continues to navigate the complexities of its housing market, renters and landlords alike will be closely watching these trends to make informed decisions.
