Rental rates in Toronto set to see a big jump by the end of the year

Rents in Toronto fell during the early days of the COVID-19 pandemic, but they have since rebounded and are expected to increase even more.

So, what’s behind the seemingly always increasing rents in Toronto? Supply issues, according to Rentals.ca rent forecast report. Toronto just doesn’t have enough places for everyone to live, and zoning laws and chronic NIMBY-ism don’t help matters.

Tony Irwin, president and CEO of the Federation of Rental-housing Providers of Ontario (FRPO), said that trying to build new housing in the city is difficult. Between what he says are “outdated” zoning laws, and homeowners pushing back against some types of housing makes it all the more difficult for Toronto to increase supply.

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The FRPO said that in order to increase supply, cities like Toronto need to update their zoning laws, make the approval process more streamlined, and keep political oversight out of it.

Average rent and affordability

According to rentals.ca, the average rent for a two-bedroom, purpose-built apartment in the GTA is $1,666.

Only 1,600 purpose-built rentals were added to the market in 2021, a decrease of 0.6%, leaving fewer options for affordable housing for low-income residents.

To make matters worse, the rentals.ca report said that new supply hitting the rental market is 43% higher than average market rents. These new GTA rentals are, on average, going for $2,220.

Average rent in the GTA hasn’t fully rebounded since rents dropped in the early days of the pandemic, but that could change. As more people move back to the city, demand for rentals increases, driving up prices.

Can you afford to continue living in Toronto if rents increase by 11%?