Urbanation released its Q3-2021 rental report for the Greater Toronto Area at the beginning of this week. The vacancy rate in purpose-built rental buildings fell to 3.0%. This is down from 5.1% in Q2-2021 and 6.4% in Q1-2021. For the former City of Toronto (the city pre-amalgamation), vacancy rates declined to 3.8% in Q3-2021, down from 9% in Q1-2021. So people are renting apartments.
At the same time, rents are growing. The average rent for newer purpose-built rentals was $2,389 per month or $3.30 per square foot at the end of last quarter. This is up 3.8% from Q2. But what is also interesting to see is how quickly the core / downtown is snapping back. Looking at condominium rentals, the former City of Toronto had the lowest leases-to-listings ratio at the start of the pandemic in Q2-2020. But in Q3 of this year, its ratio was the highest. See below.
Average rents have also spiked for condo rentals in the core, posting an 11.4% quarter-over-quarter increase and a 6.2% year-over-year increase. The average rent is now sitting at $2,405 per month or $3.62 psf. See above. Remember when everyone thought that cities were dead and nobody was ever going to live in a downtown apartment ever again? Yeah, that was funny.
Charts: Urbanation
The New York Times recently published “a portrait of new single-family homes” in the US in 2016. Here’s that portrait:
For those of those living in dense urban centers, this portrait is perhaps a reminder that in many other places a large single-family home can be had for about the price of a studio apartment.
Nothing in the above portrait likely surprised you, but it’s interesting to note that over half of all new single family homes delivered last year were in “The South.” Only 7% were built in the dense northeast.
The New York Times also recently looked at “international rents per square foot” using data from RentCafe. Here they are:
New York City sits at the top with an average rent of $4.98 psf. This is across all boroughs. I am surprised by how low some of these international rents are. But averages rarely tell you the whole story.
In any event, I do think that these two graphics start to speak to the economic spikiness that we are seeing across the US.