Briefing highlights
- Toronto condo rents surge
- Markets at a glance
- Remember 31 years ago today?
- Inflation eases, retail sales slip
- SNC-Lavalin appeals to public
- China’s growth slows
- Rogers raises annual forecast
Condo rents surge
The more affordable housing option is becoming that much less affordable as condo rental rates surge in the Greater Toronto Area.
Indeed, two recent measures show the increases are far outpacing the rate of inflation.
The latest report, from the Toronto Real Estate Board, showed “robust average annual rent increases” for condo apartments in the third quarter of the year. Average rent for a one-bedroom unit surged 9.5 per cent to $2,163 from a year earlier, while that for a two-bedroom climbed 8.3 per cent to $2,822.
“Average rents are continuing to increase at annual rates far beyond the rate of inflation in the GTA as rental demand remains very strong relative to the supply of units available,” said Jason Mercer, the group’s director of market analysis.
“We will need to see a sustained period of time within which growth in the number of rental units listed outstrips growth in the number of units leased before we see the rental market return to balance,” he said in the report.
Construction cranes beside downtown Toronto condominiums on June 15, 2018Marta Iwanek/ The Globe and Mail
“Sustained population growth and low unemployment continued to drive demand for condominium apartment rentals in the GTA in the third quarter,” said TREB president Garry Bhaura.
”Recent major investment announcements positively impacting the GTA economy will only further cement the demand for rental housing, as people move to the GTA to take advantage of quality job opportunities.”
A second report, from Urbanation Inc. showed rents per square foot also surging, by 9.4 per cent in the second quarter to $3.26.
Average monthly rental rates in turn, climbed 7.6 per cent while the average size of units dropped in the third quarter to 731 square feet from 744 a year earlier.
According to Urbanation’s measures, the cost of a studio rose by 9 per cent to $1,823, a one-bedroom by 11 per cent to $2,056, and a two-bedroom by 10 per cent to $2,720.
Average rents for purpose-built units in the 60 buildings complete since 2008 rose to $3.09 per square foot, up 17 per cent and “partly due to the completion of higher rent buildings over the past year,” Urbanation said.
Here’s another interesting stat: The “availability rate” in those 60 buildings is 1.5 per cent, up from the low of 0.9 per cent a year ago.
The numbers may differ somewhat, but the idea’s the same.
“Rapid rent growth has persisted in the GTA for over two years now, making it very clear that much higher levels of supply are needed to create a balanced market environment,” Urbanation president Shaun Hildebrand said in his report.
“While increasing condo completions should begin to have at least some calming effect on rent increases next year, more upward momentum in purpose-rental construction is required to meet overall demand.”
Construction starts on such rental units slowed in the third quarter to 826, well down from the second-quarter peak of 2,635 and the lowest in two years.
All of those under construction, however, stood at 11,172, up 56 per cent from a year earlier to the highest in more than three decades.
Read more
- Dianne Nice: Condo buyer’s guide: How to get into a hot real estate market without getting burned
- Janet McFarland: Toronto housing market’s hot rebound cools in September
- CMHC survey reveals a vast majority of first-time home buyers maxed-out their budgets
- Gary Mason: Vancouver’s housing crisis will forever haunt Gregor Robertson’s time as mayor
31 years ago today ...
It was a Monday, not a Friday, and would become known as Black Monday as global markets crashed.
The Dow Jones Industrial Average plunged more than 500 points, which then represented almost 23 per cent.
Markets at a glance
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Inflation eases
Annual inflation in Canada eased in September to 2.2 per cent, as “transitory pressures” from gas, airlines and travel tours faded.
That marked a drop from 2.8 per cent in August, Statistics Canada said today.
A separate report showed retail sales slipping 0.1 per cent in August from July. On just volumes, sales fell 0.3 per cent.
“Soft is the word of the day for Canadian economy watchers,” said CIBC World Markets chief economist Avery Shenfeld.
“Over all, soft news, not soft enough to forestall an October [Bank of Canada] rate hike, but enough to lower expectations that had been building (erroneously in our view) for a follow up hike in December.”
SNC appeals to public
Blindsided by federal prosecutors' decision to reject a negotiated settlement with the company over past corruption charges, SNC-Lavalin Group Inc. is trying to draw ordinary Canadians into its plight as it braces for a multiyear court battle it doesn’t want.
Canada’s biggest engineering firm has taken out advertising in The Globe and Mail and other media outlets to appeal directly to Canadians and highlight its take on recent events that have pummeled its share price, The Globe and Mail’s Nicolas Van Praet reports.
It frames the situation in high-stakes terms, apologizing directly for past ethics breaches, emphasizing its status as a pillar of the economy, and saying the matters-at-hand have national implications that stretch beyond the fate of one corporation.
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Chinese growth slows
Chinese officials moved quickly to ease concerns today as its official reading of third-quarter economic growth slowed for the second three-month period in a row.
The Peoples Bank of China pledged support as quarterly growth eased to 6.5 per cent from 6.7 per cent, as The Globe and Mail’s Nathan VanderKlippe reports from Beijing.
“The official figures have been too stable in recent years to be taken at face value, but there is little doubt that the economy is currently cooling,” said Julian Evans-Pritchard, the senior China economist at Capital Economics.
“Looking ahead, we doubt the latest pick-up in infrastructure spending will be enough to prevent the economy from cooling further in the coming quarters,” he added, projecting, too, a “further loosening of both monetary and fiscal policy in the coming months, which should put a floor under growth by about the middle of 2019.”
Chinese stocks plunged initially, but picked up markedly “thanks to rare intervention from a trio of Chinese regulators,” said IG market analyst Joshua Mahony.
“It was the PBoC’s promise to provide supportive measures which caught the eye, while initial disappointment at the declining growth rate will have been cushioned by improved unemployment, retail sales and fixed asset investment figures.”
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What to watch for today
Economists expect Statistics Canada to report that annual inflation eased in September, but, at 2.7 per cent, may still be above the level of your pay raise.
"Energy prices remain a lift to inflation but should decelerate on a year-over-year basis, whereas food prices should pick up marginally," TD economists said in a lookahead.
The federal agency is also expected to report that retail sales rose by about 0.5 per cent in August.
Michael Babad