Some relief from rent increases maybe on the way.
After constant jumps over the past months, and while rent rose by 7.6% in the third quarter of 2018, things may slow down slightly in 2019.
According to Urbanation Inc., a source of information and analysis on the GTA condominium and rental markets, the total inventory of purpose-built rentals under construction moved up to 11,172 units, which is the highest level it has reached in more than 30 years and 56% higher than a year earlier.
With that, the inventory of proposed purpose-built rentals increased to a high of 39,750 units across 128 projects, up from 30,981 proposed units a year ago in the third quarter of 2017.
“Rapid rent growth has persisted in the GTA for over two years now, making it very clear that much higher levels of supply are needed to create a balanced market environment,” said Shaun Hildebrand, President of Urbanation, in a release. “While increasing condo completions should begin to have at least some calming effect on rent increases next year, more upward momentum in purpose-rental construction is required to meet overall demand.”
Urbanation reports that the number of condo lease transactions reached their highest third quarter level in three years, rising 5% from a year ago as slightly more supply came into the market.
But, market conditions still remained “exceptionally tight.”
“Despite the uptick in leasing activity in the third quarter, rental transaction volume in the year-to-date period remained 4% lower than last year, adding pent-up demand to the market and keeping strong upward pressure on rents,” stated the report.
The average rent for a one bedroom, without a den, surpassed $2,000 for the first time, rising 11% annually to $2,056. Two bedroom lease volume declined by 5% from last year, with average rents up 9% to $2,810.