The Toronto-based real estate consulting firm also reveals that Q1-2023’s average for purpose-built rentals is up 13.8% based on units that turned over in Q1-2023 and relative to the same quarter in 2022. Despite that rise being on the lofty side, it also demonstrates that the rents are inflating at a slower pace compared to Q4-2022, when the rate of annual rent increase clocked in at 15.1%.
Urbanation’s data also shows that condo demand is shifting to smaller units with lower monthly costs. Undoubtedly a reflection of affordability challenges plaguing the GTA, smaller unit types saw dramatic price growth in the first quarter, with rents for units under 500 sq. ft rising 21% year over year.
Attributed to record high population inflows, low homeownership affordability, and a strong labour market, the GTA’s rental market “remained substantially undersupplied” in the quarter, says Shaun Hildebrand, Urbanation President. As such, vacancy rates came in low, at 1.8% for purpose-built rentals. Although that figure is up slightly over its year-ago measure of 1.6%, Q1-2023 is the fifth straight quarter in which the rate was below 2%.