Rental Market Report from Toronto

Short term rentals Toronto

According to the Rental Market Report from Toronto Regional Real Estate Board (TRREB), the average rental price for a one bedroom condo apartment was $2099 in Q4 2021, from $1845 in Q4 2020, an increase of +13.7%. This resulted from several reasons including a year over year decline of available units for rent. Since the onset of the Covid-19 pandemic, the brief contraction in the rental market has since recovered and has accelerated into double digit growth and nearing pre-pandemic highs. With a tightening of availability of rental supply, this will ultimately increase rental prices going forward.


1.

[1.] Sourced: TRREB (2022). Rental Market Report Fourth Quarter 2021

Now let’s extract some statistical data derived from the City of Toronto (Current City of Toronto Average Market Rents & Utility Allowances). For our purposes, we will focus primarily on data pertaining to One- bedroom apartments.

According to 2021, Average Market Rent (AMR) figures, which are used to set Affordable Housing monthly occupancy costs, show that the cost for a one bedroom apartment will be on average $1431 per month.  In order for an individual to qualify for Affordable Housing, an applicant’s household annual gross income cannot exceed to be more than four times the annual rent of the unit being applied for. In this situation, the applicant applying for the one bedroom apartment condo cannot have an annual household income greater than $68,688. ($1431 average market rent x 12 months x 4)

Under the Affordable Housing units whereby a tenant pays for any utility cost, they are entitled to a utility allowance deduction from their monthly occupancy cost (Includes if tenants pay each utility separately or as a bulk/suite-metering). The total amount for (Hydro, Heat, Water and Hot Water) amounts to $90 per month. So the total net cost per month for a one bedroom condo apartment with basic utilities (under Toronto Affordable Housing) would cost on average $1341 per month.

2.

[2.] Sourced: City of Toronto (2021), Current City of Toronto Average Market Rents & Utility Allowances

In this section, we would like to apply our perspective analysis to the data provided above. For all intents and purposes, this is for general discussion and purely our own thoughts and opinions.

We all know the situation that we currently live in where the rental price, particularly in Toronto, continue an uptrend with no reason to believe that it will change course in the near term. The reality is this: rental prices will continue to rise due to short supply of available rents and with a continual rise of home prices. Real estate investors looking to acquire rental property at higher purchasing price will face an increase in annual carrying costs from a higher expected mortgage payment (all other things being equal). This increase in carrying costs would ultimately be passed down to the end user, the tenants, in the form of higher monthly rental costs.  

This now makes the ability to live in the GTA and (specifically Toronto) extremely difficult and out of reach for many individuals. Even with the Affordable Housing monthly cost, once you factor in other costs such as internet/TV, parking (if not included in the monthly rent), the true cost now increases to somewhere closer to $1600 not $1341. We use the Affordable Housing as an example to provide a conservative average cost but we know this is rarely the case especially with the rental supply currently contracting. I think it is safe to say that the actual price in Toronto is much higher and with projections in the 2022 to be higher even so.

So what are the alternatives? Well for one, shared rooming or private room rentals can offer individuals a more affordable way to still live in the city and maintain their current lifestyle. It is a great solution for those individuals seeking to balance work and personal life without experiencing financial stress. The co-op or shared space way of living has many positive benefits from reduced cost of living, increased social skills, enhanced co-operative skills and adopting responsible habits. Furthermore, it may assist in building stronger teamwork and collaborations with co-workers. These personal living experiences can sometimes reinforce and produce positive outcomes in the workplace environment.

Related posts

Tenant Insurance

Is having tenant insurance coverage really that important?

  • March 3, 2022
  • Blog

Tenant insurance (often referred to as renter’s insurance) helps cover the costs related to replacing or… Read More

“A new approach for landlords.”

  • February 18, 2022
  • Blog

Two of the most important questions that a landlord thinks about are: (1) Will I cash-flow… Read More

Search

September 2022

  • M
  • T
  • W
  • T
  • F
  • S
  • S
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30

October 2022

  • M
  • T
  • W
  • T
  • F
  • S
  • S
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31

Compare listings

Compare