While rents in Toronto are finally coming down a bit, the average apartment in the city still costs about $2,600 a month, making 6ix far from one of the best cities in the province for renters.
However, there is one type of property where the average rental costs are declining significantly: condominiums, which are also experiencing a rapid decline in the real estate market, at least in terms of sales.
GTHA rents are falling annually for the first time in three years.
Urbanation's Q2 2024 Rental Market Results:https://t.co/oSJQVFlz4T pic.twitter.com/qbbdEtaynV
— Urbanation Inc. (@Urbanation) July 30, 2024
According to a new report from Urbanation, average condo rents in the city and surrounding area fell for the first time in three years compared to the same quarter last year, reaching $3.97 per square foot in the second quarter of 2024 (which equates to $2,723 for a 686-square-foot space).
While this is only 1.2 percent below prices at the same time last year, it is still a trend in the opposite direction to what the agency observed.
“The overall decline in condo rents occurred despite strong demand during the quarter. The number of condo leases in the GTHA reached a record 16,169 units in the second quarter, representing a 29 percent annual increase and a 60 percent increase over the 10-year average,” the company writes.
While I feel sorry for homeowners, in the long run, this is a good thing. Home ownership should never be an income-generating investment.
— Kelly (@BFLMouse) July 26, 2024
“At the same time, however, the total number of condominiums offered for rent in the second quarter increased 47 percent year-on-year to 21,695 units. Listings jumped last quarter as the number of newly registered condominiums increased 82 percent year-on-year to 8,380 units.”
This also reflects the oversupply of condos for sale on the market in the area, although buying activity has dropped dramatically, falling to a 27-year low, while prices still have not changed all that much.
In terms of apartment sizes, studio apartments saw the largest price decline (3.9 percent to $5.18 per square foot), compared to three-bedroom apartments, where average prices fell only 0.6 percent (to $3.83 per square foot) as of the second quarter of 2023.
Condominium rents have also fallen slightly more in the city itself than in the 905 metropolitan area (2.1 percent versus 2.0 percent), although they are of course still more expensive ($4.10 per square foot versus $3.63 per square foot).