There’s good news and bad news for Toronto renters.
The latest Rental Market Report released by Canada Mortgage and Housing Corp. (CMHC) says Toronto is the only major Canadian city where rental apartment vacancy rates increased in 2021.
During the year ending in October 2021, apartment vacancies climbed to 4.4% from 3.4%, contrary to the national trend which showed unit availability decreasing.
“The main reason is because Ontario really faced the most stringent (COVID-19) restrictions compared to many other regions across the country,” said Dana Senagama, CMHC’s Toronto analyst.
“We had more lockdowns and it was prolonged. And what we find in the Toronto market, it’s predominantly occupied by younger people working in the hospitality, service industries, and then new immigrants, students, etc.,” added Senagama. “And they were the people immediately impacted by the rental market. That’s the reason. So what I would say for 2020 and 2021, it is an anomaly, not a reflection of the market as a whole … This wouldn’t happen on a given year.”
However, Toronto still had the second-highest average monthly rent for two-bedroom apartments, at $1,679, trailing closely behind Vancouver’s $1,824.
“Overall, we’re still plagued by a supply problem,” Senagama said.
“We just have more people wanting to live in (Toronto) accommodation, be it rental or ownership, than there is supply. That’s the underlying problem and that’s what kept rents high.”
New data from the CMHC also shows just how many hours of work it will take to afford — defined as spending no more than 30% of gross income on monthly rent — an average Toronto rental unit.
While full-time employment is considered 150 hours of work per month (or 37.5 hours weekly), the CMHC concluded that as of October 2021, it took 178.3 hours of work per month in Toronto to afford a two-bedroom apartment at no more than 30% of gross income.
That’s 7.6 hours more than the previous October, when the number sat at 170.7 hours.
Senagama said the major caveat here is that CMHC is referring to “per person, but there is a large component of renters that we call the household, which is not always a single person. This is just to gauge the lack of affordability crisis in Toronto. It’s expensive.”