Emerging from almost two years of pandemic policies, the GTA rental market is in flux. Last year’s rent freeze kept prices stable but rents are now trending up, spiking as Toronto landlords try to recoup their losses.
Rising rents, in combination with declining inventory, are making the market even more competitive – providing plenty of opportunities for real estate investors to capitalize on the upswing.
Short supply, high demand
Condo rentals fell off in the last quarter of 2021, dropping by 13.9% compared to the same period in the previous year, according to the Toronto Regional Real Estate Board (TRREB). Rental for the average one-bedroom condo in Toronto reached $2,099, a 13.7% increase from 2020, while a two-bedroom unit jumped 12.6% to $2,763.
TRREB President Kevin Crigger commented: “After a relatively brief pandemic-induced blip in rental supply, available rental listings have declined. This has made it more difficult for would-be renters to find a place to live – essentially you can’t rent what isn’t available. By extension, the lack of inventory has also resulted in increased competition between renters, pushing average rents higher.”
Making the most of the moment
What goes up must come down, and rents are no exception. While a corresponding downward swing is inevitable, the market will take time to self-correct. Landlords still have plenty of opportunities to make the most of the competitive market, especially given that demand shows no signs of slowing in the short term.
TRREB Chief Market Analyst Jason Mercer predicts that rents will continue to soar over the coming year, saying: “Demand will increase as both immigration and temporary migration into the GTA picks up over the next year. Both sources of population growth result in more demand for rental accommodation. In the absence of a marked increase in the supply of rental units, expect average rents to trend further upward in 2022.”
For investors considering a move into Ontario real estate, this is their moment. While the hot market may be off-putting for first-time buyers, it’s still a worthwhile option for seasoned investors looking to expand their portfolio with an investment that has huge earning potential.
A leading provider of Toronto property management services, Highgate Properties offers professional residential property management services including tenant screening, maintenance, repairs, and more. Our dedicated team takes the hassle out of property ownership so you can reap the rewards of your investment without the headaches. For more information on how Highgate Properties can help you kickstart your career as a Toronto landlord, get in touch with us today.