If you're looking to rent an apartment in Toronto this year, a single report is getting ready to pay more than the previous tenant.
Rentals.ca and Bullpen Research suggests rental rates will jump 11 per cent in the city this year, compared to an average of 6 per cent in the country.
The average cost of renting a two-bedroom apartment could jump to over $ 2,600 a month, escaping into a large part by providing shortfalls – despite the numerous condos you see being built as you drive into the downtown core.
Bulpan research President Ben Myers says that the appearances were sailing.
"It is just more visual. Of course, when you drive down the garden, you see all the units being completed," he says. "But there are a lot of areas in Toronto where people want to live and there just isn't the supply of rental units in those markets."
In addition to a shortage of supply, investors say a number of steps taken to cool the housing market have had the unintended consequence of increased rental prices.
The new mortgage printing test is also part of what drives up rental prices by setting off a domino effect.
"The B-20 change requires people to qualify at 2 per cent higher than their contracted rate. That's reducing mortgage credit availability and making people engage in more," he says – which in turn increases the demand for rental space. In addition, existing tenants are staying instead of paying more to move
With low supply and low turnover, Myers says the rental market is now seeing birding wars.
"Rental units run for 105 or 107 per cent of the list price – people are actually betting on it. People have to set up really detailed packages for potential landlords to see how big a tenant they are," he says.
Meers says 25,000 to 30,000 more units are needed to meet current demand, although he doesn't expect to see what happens.