Greater Toronto Area condo-rental rates will remain historically high in 2024, says a new report from the region’s real estate board.

In the absence of new purpose-built and secondary-market rental supply, conditions are expected to stay extremely tight, according to the Toronto Regional Real Estate Board. Condo rentals hit their second-highest total, 48,000, in 2023 after peaking at 55,000 in 2021.

Condo rentals rose 7% in 2023 as one-bedroom and two-bedroom rents climbed 7% and 9%, respectively. But rent growth slowed somewhat in the second half as new supply exceeded demand.

New condo sales bore the brunt of a housing slowdown across the region in 2023, said TRREB, citing Altus Group data.

Toronto-area benchmark prices slipped 15% from their peak in 2022 as sales were down by almost half. If the Bank of Canada holds or lowers interest rates, stronger demand in the new-home market will likely occur, said TRREB.

“Demand for ownership housing in the GTA will start improving in 2024,” said TRREB Chief Market Analyst Jason Mercer in a news release. “Record population growth, a resilient economy, low unemployment and declining mortgage rates in the second half of the year will result in increased home sales compared to 2023.”

TRREB is forecasting 77,000 home sales in 2024 at an average price of $1.17 million.

Image: Trinity Group