TRREB Releases Q4 2022 Rental Market Statistics

 TORONTO, ONTARIO, January 31, 2023 - Average condominium apartment rents continued to increase by double-digit annual rates in the fourth quarter of 2022. However, while market conditions remained tight enough to support very strong rent growth, there was more balance in the rental marketplace compared to the same period a year earlier in 2021.

The number of condominium apartment rental transactions reported through the Toronto Regional Real Estate Board9s (TRREB) MLS® System was down on a year-over-year basis by 19.9 per cent in the fourth quarter of 2022. The number of rental listings was also down over the same period, but by a lesser annual rate of 11.8 per cent. The fact that the number of units leased was down by more than the number of units listed suggests that would-be renters benefitted from more choice compared to a year ago. 

"Strong population growth based on record immigration and robust job creation across a diversity of economic sectors drove rental demand in 2022.  In addition, aggressive interest rate hikes by the Bank of Canada impacted affordability for many households, prompting a shift from homeownership to rental. All of these factors will continue to support strong rental demand in 2023,"  said TRREB President Paul Baron. 

The average rent for a one-bedroom condominium apartment increased by 19 per cent to $2,503 in the forth quarter of 2022.  Over the same period, the average two-bedroom rent increased by 14.1 per cent to $3,178.

"Tight rental market conditions and strong rent increased will be the norm more often than not for the foreseeable future.  On one hand, we will continue to experience strong rental demand in the GTA based on solid fundamentals. On the other hand, the persistent supply shortage will continue to result in strong competition between would-be renters, exerting upward pressure on rents.  The solution is no secret: we need to see new policies pointed on more supply to translate into shovels in the ground for many years to come," said TRREB Chief Market Analyst Jason Mercer.

GTA REAL ESTATE MARKET STARTS THE NEW YEAR THE SAME AS IT ENDED LAST YEAR TORONTO, ONTARIO, FEBRUARY 3, 2023 

As we moved from 2022 into 2023, the Greater Toronto Area (GTA) housing market unfolded as expected. The number of January sales and the overall average selling price were similar to December 2022. On a year-over-year basis, both sales and prices were down markedly, continuing to highlight the impact of higher borrowing costs on affordability over the last year. “Home sales and selling prices appear to have found some support in recent months. This coupled with the Bank of Canada announcement that interest rate hikes are likely on hold for the foreseeable future will prompt some buyers to move off the sidelines in the coming months. Record population growth and tight labour market conditions will continue to support housing demand moving forward,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron. GTA REALTORS® reported 3,100 sales through TRREB’s MLS® System in January 2023 – in line with the December 2022 result of 3,110, but down 44.6 per cent from January 2022. The average selling price for January 2023 at $1,038,668 was slightly lower than the December 2022 result and down by 16.4 per cent compared to the January 2022 average price reported before the onset of Bank of Canada interest rate hikes. The MLS® Home Price Index (HPI) Composite Benchmark was in line with the December result, but down by 14.2 per cent compared to January 2022. “Home prices declined over the past year as homebuyers sought to mitigate the impact of substantially higher borrowing costs. While short-term borrowing costs increased again in January, negotiated medium-term mortgage rates, like the five-year fixed rate, have actually started to trend lower compared to the end of last year. The expectation is that this trend will continue, further helping with affordability as we move through 2023,” said TRREB Chief Market Analyst Jason Mercer. “All three levels of government have announced policies to enhance housing affordability over the long term, including many initiatives focussed on increasing housing supply in the ownership and rental markets. Most recently, we were encouraged to see Toronto City Council support the Mayor’s 2023 Housing Action Plan as part of the City’s overall $2 billion commitment to housing initiatives,” said TRREB CEO John DiMichele. TRREB will release its annual Market Outlook and Year in Review report on Friday, February 10, 2023.