Condo rentals surge as sales fall

Thursday, April 18th, 2013

Vernon Clement Jones

Greater Toronto Area Realtors reported a 13 per cent rise in the number of condominium apartments rented through the MLS system in the first quarter, even as actual sales fell compared to the same year-ago period.

Demand for rental condominium apartments remained strong during the first quarter of the year,” said Toronto Real Estate Board President Ann Hannah. “People looking for higher end rental accommodation, including those who have temporarily put their decision to purchase on hold, were likely driving rental activity during the first three months of the year.

That could well be.

While there were 4,277 condominium apartments rented in the first three months of 2013, the sale of 4,133 condominium apartments sold over the same period represents a 17 per cent drop, year over year.

The increasing demand for condo rentals is accruing to the benefit of many investors.

The average monthly rent for one-bedroom condominium apartments in the first quarter was $1,597 – up by almost four per cent compared to Q1 2012. The average two-bedroom condominium apartment rent was up by slightly more than one per cent over the same period to $2,114.

“The rental market has remained quite tight over the last year,” says Jason Mercer, TREB’s senior manager of market analysis. “Competition between renters has been strong enough to drive increases in average rents. However, growth in the number of units listed outstripped growth in the number of rental transactions in the first quarter, suggesting that renters benefitted from more choice.”

Inevitably, that means that the current landlord’s market may start to swing to renters as fewer condo sales are made.

“If this trend continues, the pace of rent growth could moderate,” says Mercer.

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