Students and international renters help increase PSF by six percent in GTA and GTHA

During the preceding business quarter, the rental market in the Greater Toronto and Hamilton Area (GTHA) continued to recover from COVID-19 problems, as students and international renters returned to the region.

Zonda Urban — formerly Urban Analytics — revealed that prices for purpose-built rental units in the region have increased while vacancy levels have reduced in its Q3-2021 GTHA Rental Take report, which was sent out to email subscribers today.

Rents increased by 6%, from $3.27 per square foot (PSF) in Q2-2021 to $3.46 per square foot (PSF) at the end of Q3-2021, an increase of $0.19. Rents have risen $0.02 per square foot year over year.

Downtown has the highest average list rents on the market at $3.83 per square foot, while Scarborough and Brampton have the lowest at $1.89 and $2.77 per square foot, respectively.

The 2,701 new units launched in the first half of 2021 were “steadily absorbed” by the GTHA market. Vacancy rates decreased by 6% quarter over quarter to an overall average of 13.5%, but grew by 2.4 percent from Q3 to 2020. The vacancy rate in the downtown region has dropped from 11.3 percent to 8.3 percent as students and overseas renters return to the neighbourhood.

The lower quarter was blamed on the absorption of nine new projects that began in the first half of 2021.

“The vacancy for both all projects and just stabilized projects decreased when compared to the previous quarter, indicating the return of renters to the market,” said the report. “The increase in demand has put pressure on rental rates.”

The largest drop in vacancy was in Toronto’s Midtown-Uptown, which fell 15.2 percent from 19.8 percent in Q2-2021 to 4.5 percent by the end of Q3-2021. According to Zonda Urban, this is due to an increase in demand as renters return to the inner submarkets.

Since Zonda Urban began tracking the GTHA in 2019, the number of purpose-built rental flats in the region has increased from 31 to 60, totaling 15,374 units. Forty-one of these structures are fully leased, while the remaining 19 are still in the early lease-up phase. During Q3-2021, one project, The Waverley by Fitzrovia in Toronto, was completed.

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