Although the number of units rented in the first three months of 2015 grew by 11 per cent compared with a year ago, the report says new listings shot up by 21 per cent as a slew of newly completed condo units came on the market.
Meanwhile, average rents grew at a slower pace and even declined in some neighbourhoods — perhaps a surprising development in a city where the booming real estate market continues drive up already sky-high prices for homebuyers.
Condo rents grew by 1.1 per cent annually to an average of $2.37 per square foot across the city, but declined in several submarkets, including the downtown core, where they slipped by 2.1 per cent.
The statistics come just as the rental apartment market is poised to spike, after stagnating for the past decade while developers focused on building condo towers.
Urbanation says eight rental buildings containing a total of 2,458 units are currently under construction in the Greater Toronto Area, with another 34 projects containing 6,723 units proposed. That's a 75 per cent increase over the number of rental units developed over the past 10 years.
Urbanation senior vice-president Shaun Hildebrand says population growth among people in their 20s and 30s, who comprise the bulk of the city's renters, has slowed.
"The supply is coming at a time when some of the demographic forces are perhaps not as supportive as they were last year, and the slight reduction in interest rates may have caused some people to decide to buy instead of rent," Hildebrand said.
Despite the fact that competition between landlords to fill condo units has got tighter, Hildebrand says he doesn't expect a significant uptick in vacancies.
Lower mortgage rates mean that investors who have purchased condo units in order to rent them out will have more flexibility to lower their rental rates, he said.
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