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The average monthly rent in the Greater Toronto Area (GTA) increased 16.5 per cent year over year for all property types in May to $2,327 from $1,998 in May 2021, according to the latest Bullpen Research & Consulting and TorontoRentals.com Toronto GTA Rent Report.
Month over month, the average rent rose 5.7 per cent in May in the GTA making it the largest monthly increase in three-plus years. But rents in May are still a little below what they were three years ago in May 2019 at $2,365.
Reduced supply coupled with increased demand from immigration, more students, and recent graduates moving out of their parents' homes have contributed to the rapid rise in rents.
High inflation, rising interest rates, more short-term rentals and supply-chain issues have helped tighten up supply. Also, fewer people tend to move during uncertain economic times, and more would-be first-time home buyers are deciding to stay on the sidelines and in rental housing, drying up supply.
“The average GTA rent shot up month over month in May, rising by 5.7 per cent, the highest monthly increase since this data was first reported in 2018," said Ben Myers, president of Bullpen Research & Consulting.
"Investor-owned condominiums led the way, experiencing significant annual growth of 25 per cent from May of last year. High demand for downtown rental properties, coupled with less supply due to rates hikes and delayed occupancies of new projects as a result of labour stoppages and supply chain issues are all contributing factors to the rent inflation.”
Toronto had the highest average monthly rent for condominium rentals and apartments at $2,438, an annual increase of 19.8 per cent.
Burlington and Etobicoke followed closely, with average monthly rents of $2,233 and $2,263 per month respectively, with year-over-year increases of 18.3 per cent and 17 per cent over May of last year.
Next in line for year over year average monthly rent for condo rentals and apartments were:
- Mississauga at $2,224, up 12.9%
- Oshawa at $1,807, up 12.4%
- York at $2,083, up 12.2%
- Oakville at $2,299, up 11.2%
- North York at $2,102, up 10.2%
- East York at $1,898, up 8%
Vaughan was the only city with an annual decline in average rent for condo rentals and apartments, decreasing by 6.6 per cent to $2,072 per month.
The highest rents in GTA neighbourhoods from January to May for condominium rentals and apartments were in the Bay Street Corridor at $2,764 per month, an increase of 12 per cent over 2021 overall, and 1 per cent over 2019, the year when rents peaked.
The highest rent growth has occurred in Mississauga’s Core neighbourhood (often referred to as the Mississauga City Centre), with rent for condo rentals and apartments up 28 per cent annually to $2,728 per month. Core rents are 17 per cent higher than in 2019.
Areas with annual rent growth of 16 per cent to 19 per cent include North St James Town, Kensington-Chinatown, The Annex, Mimico and Niagara.
The only market where rents are lower than last year for condo rentals and apartments is Cabbagetown. But a big shift occurred in the average listing, with last year’s average unit size at 742 square feet, and then dropping to 586 this year.
Parkdale rents in 2022 are still way below the 2019 peak (-19 per cent), but the average unit size was also smaller when comparing listings in the two periods (695 square feet versus 611 square feet).
Average GTA rent by building type year over year
- Single-family homes at $3,233, up 12%
- Apartments at $2,092, up 10%
Two-bedroom units in the GTA had the largest annual increase in average rent in May, up nearly 16 per cent to $2,584 per month, while three-bedroom units rose 12 per cent annually to nearly $3,000 per month.
- Waterfront Communities, the Island neighbourhood, average rents per square foot for condo rentals and apartments in May have increased by 23% year over year.
- Bay Street Corridor, average rents have risen by 20% annually per square foot
- Annex, average rents have increased 20% annually;
- Church-Yonge Corridor, average rents have increased 20% per-square-foot year over year;
- Moss Park, average rents have gone up 13% annually.
The Toronto GTA Rent Report takes a deeper dive into analyzing monthly, quarterly and annual asking rates and trends in the Toronto and the GTA rental markets.
Ontario decides to cap rental increases below inflation
For landlords and renters, the province decided to cap rental increases for 2023 at 2.5 per cent, and for 2022 it was 1.8 per cent. In the short term, this decision protects renters. However, it disincentives property developers from building more rental housing, which in this incredibly tight rental market is dangerous.
For May 2022, Canada's inflation rate was 7.7 per cent, according to Statistic Canada.
