Data from Urbanation indicated that Toronto condo rent rates increased by 7.6% on an annual basis to reach an average of $2,385 in Q3 2018, and by 17% for newly available purpose-built units.
Long considered a haven for the city’s affordability seekers, the rental market is becoming less friendly to all but the wealthiest families.
“We’ve reached a point now where given the amount of people, industries we’re attracting, we are already becoming terribly unaffordable for everyone,” University of Toronto professor Richard Florida told Bloomberg. “We’re at a crisis and we don’t even realize it: Our transit, traffic problem and housing problem are urgent matters.”
“Everyone’s getting priced out,” he added. “My students at the Rotman School of Management in the University of Toronto, who are going to be some of the most successful students in Canadian business, are now saying it’s doubtful they could ever afford a single-family home.”
A scarce supply of rental units is not helping matters, with Toronto’s apartment vacancy rate currently around 0.5%.
“Homelessness is growing, couch-surfing is growing and this will have a lot of pressure on families and on the city itself,” according to Alejandra Ruiz Vargas of the low-and-moderate-income advocacy group Association of Community Organizations for Reform Now Canada.
Not even a seemingly healthy number of housing starts is enough, as a recent study by Altus Group Ltd. reported that the pace of rental units entering the market is not enough to accommodate Toronto’s influx of 17,000 new renter households a year.
The condo completion rate has nearly reached a 5-year low of around 10,000 units. Also, only 11,620 new units across 60 purpose-built rental buildings were built since 2005.
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