The average rent for condo apartments leased through the MLS system increased by 8.3% in Q1-2017 from a year ago to $2.75 psf, moderating from the 11.6% annual growth recorded in Q4-2016. At an average of $1,993, monthly rent levels held steady from the record high reached during the previous quarter. Excluding the impact of new units, same sample annual rent growth was 5.5%, down from 6.8% in Q4-2016. Accounting for the higher than normal growth witnessed in recent quarters, same sample rents have grown by an average of 2.3% annually over the past five years.
An improvement in condo supply growth alleviated some of the recent pressure on rents. The 11,315 newly completed condo apartments that reached their final closing during the past six months represented a 33% annualized increase, which stabilized total rental listings as turnover of existing condo rentals continued to decline. As a result, market conditions showed a bit more balance, as the ratio of leases-to-listings edged down to 77% in Q1 from 78% a year earlier, the average days on market increased to 20 from 13 in Q4-2016, and the percentage of units that were leased for above asking rents declined to 9% from 17% in the previous quarter.
Purpose-built Rental Survey
Urbanation’s survey of purpose-built rental buildings completed since 2005 revealed that average rents for available units increased by 5.6% annually to $2.52 psf in Q1-2017. Excluding the impact of new completions, same sample rents grew by 2.5%, maintaining a modest pace despite recording an average vacancy rate of just 0.5%.
Purpose-built rental development applications increased to a total inventory of 29,360 proposed units, up from 27,812 units during the previous quarter. Growth in proposals has slowed after more than doubling during 2016. Meanwhile, the number of purpose-built units under construction fell to 5,290 units, down by 8% or 455 units from a year earlier.