From our famous bagged milk and maple syrup to the roof over our heads, life in Toronto feels more expensive than ever. As many homeowners struggle with mortgage payments amid successive interest rate hikes, the rest of the population is toughing it out through a frenzied rental market that only grew more expensive last month.
According to the latest National Rent Report from Rentals.ca and Urbanation, Toronto finished second on a list of 35 cities for average monthly rent in December 2022 for both one- and two-bedroom units.
It will now cost a Toronto renter a monthly average of $2,457 for a one-bedroom unit, and a mind-bending $3,215 to rent a two-bedroom unit.
That average one-bedroom rental rate marks a 21.3 per cent leap measured year-over-year, while two-bedroom rents rose by a slightly less-alarming 18.1 per cent.
It’s a bit less concerning when you break the numbers down month-over-month, and it actually cost a renter 3 per cent less for a one-bedroom and 3.9 per cent less for a two-bedroom unit than it did in November 2022.
Overall, the average unit in Toronto across all unit types increased by almost 23 per cent year-over-year in December to $2,775.
This pace of growth exceeds even the most expensive Canadian city for renters, Vancouver, which saw its average rental price spike by a slightly lower rate of over 21 per cent – though it will still cost you an average of $305 per month more to rent in the city where the Canucks disappoint in the regular season than in the city where the Leafs lose in the first round.
Canada’s two most expensive cities (and tragic NHL markets) to rent registered well above the national averages in both prices and their rate of acceleration.
The average rent for all property types across Canada rose just over 12 per cent year-over-year to $2,005, which, while comparatively cheap, is still $217 more than the typical Canadian monthly rent just a year earlier.
The National Rent Report attributes rising rents to a combination of factors, from post-lockdown recovery to record population growth. Other stressors include homebuyers taking a step back from the market amid interest rate hikes and moving into rentals, and the low vacancy rates associated with all of these conditions.
“The Canadian rental market had one of its strongest years ever in 2022, more than reversing any weakness experienced during the pandemic,” said Shaun Hildebrand, president of Urbanation, a real estate research and consulting firm.
“Rental demand is primarily being driven by a quickly growing population that is finding it increasingly more difficult to afford homeownership or find suitable rental housing. Looking ahead for 2023, rents are expected to continue rising, but less heated growth can be expected as the economy slows and new rental supply rises to multi-decade highs.”
The report states that more moderate rent increases are forecast for this year amid a softening economy and expected job losses. A growing population and record immigration levels are expected to add to demand, though Rentals.ca and Urbanation anticipate new rental completions to exceed a 40-year high in 2023.
READ MORE: Canada’s most affordable places to live