The average one-bedroom apartment in Toronto now costs over $2,300

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Rising interest rates are holding prospective homebuyers in an already “significantly” undersupplied rental market, spurring yet another month of price increases in Toronto.

According to the September 2022 National Rent Report from Rentals.ca and Bullpen Research & Consulting, the average rent for a one-bedroom apartment in Toronto hit $2,329 in August — a 3.2% jump from July and an annual increase of 17.1%.

The average two-bedroom in the city now costs $3,266 per month, a monthly increase of just 0.2%, but a staggering 24.3% jump from August 2021.

Toronto’s sky-high rents made it the second-most expensive city in Canada last month, paling only to Vancouver.

Canada-wide, the average rent for a one-bedroom apartment is $1,628, while a two-bedroom runs $2,038.

“On a national level, average rents in August topped the pre-pandemic record high from the fall of 2019, with prospective tenants looking at properties that are $200 more expensive on average than a year earlier,” said Ben Myers, president of Bullpen Research & Consulting.

“With several economists calling for an extended ownership housing market correction, demand has shifted dramatically to the rental market, which is significantly undersupplied in many major Canadian municipalities.”

The national average rent hit $1,959 in August, topping the previous high of $1,954 recorded in September 2019.

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Myers noted that pageview data from Rentals.ca shows that demand for rentals has risen nearly 40% from August 2021 across Canada, and is up 70% from August 2020.

Based on the data, Toronto was the eighth-most sought-after city in Canada in Q3 2022, the first time it’s cracked the top 10 since tracking began in Q4 2018. Waterloo was the most popular city in Ontario and the second-most viewed in the country.

The province experienced “strong” rent growth in 2019, but prices plummeted during the pandemic. The average rent for a two-bedroom fell 8% between August 2019 and August 2020, but went up 13% between August 2021 and August 2022.

The average rent for a one-bedroom in Ontario rose 8% annually in August 2022. At $1,956 per month, though, it’s still lower than the $2,052 average seen in 2019.

On a local level, the largest price increase in the province last month was seen in Mississauga. One-bedrooms in the city rose 4.5% on a monthly basis to $1,946. Hamilton recorded the biggest monthly jump for two-bedrooms, which were up 7.1% to $2,167.

Annually, London experienced the largest price increase for both one and two-bedroom units. The former increased 36.9% to $1,783, while the latter rose 30.4% to $2,112.

“There continues to be outsized rent growth in Canada,” the report reads.

“With another interest rate hike from the Bank of Canada, potential buyers are further dissuaded from purchasing, sending more demand into the rental market. The hikes are having a negative impact on job growth, which could keep rents in check if young Canadians find themselves jobless.”

Rentals.ca and Bullpen Research & Consulting