A one-bedroom in Toronto now costs over $2,500 a month — with no relief in sight

The financial squeeze continues for Toronto renters who have to move in today's market, as new data shows the average one-bedroom listing hit $2,501 per month in February.

The Rentals.ca data, analyzed by research firm Urbanation, shows a 21.5 per cent increase in those asking rents over the last year. The average two-bedroom listing in Toronto meanwhile rose by 19.4 per cent year-over-year, the report notes, to $3,314 per month in February.

It's a reality that means for any households earning less than $100,000 per year, the average one-bedroom listing today is just too expensive - with the often-used threshold for unaffordable housing being anything beyond 30 per cent of a household's income.

To comfortably afford the average two-bedroom listing in Toronto today, a household would have to be earning at least $130,000 per year, according to the same guidelines - at a time of high inflation where other necessities like groceries have come with a higher bill.

Analysts aren't expecting that trend to change course anytime this year, with Urbanation forecasting continued rent increases throughout 2023 - though potentially more moderate ones than seen recently - given Toronto's ever-rising population and the number of would-be homebuyers that continue to be priced out of the real estate market.

I don't see it becoming less expensive," Urbanation president Shaun Hildebrand said Monday afternoon, noting he still expects a roughly five per cent rise in asking rents across the GTA in 2023.

Still, he believes the rocketing growth seen recently is simply unsustainable, and will begin to level out. Rents have risen much faster than incomes, and it's reduced affordability to a point where it's obviously going to have some impact on demand," he said.

Hildebrand sees some indication of the market moderating in recent months, with February listing costs for the GTA dipping ever-slightly from three months ago - a change of 0.9 per cent. The market got a bit too far ahead of itself. Rents rose too fast in a short period of time."

As confirmed by the Canada Mortgage and Housing Corp. in its annual market report, the Toronto area has seen a higher-than-usual level of new purpose-built rental housing entering the market in recent years - as well as an injection of new condos that are often snapped up by investors and form a secondary rental market. But in its January report, the federal housing agency noted that recent growth in the rental market simply couldn't offset growing demand.

Access to affordable supply remains a challenge for low- and middle-income renter households," the CMHC report reads, while pointing out that rentals within reach of lower-income households had the lowest vacancy rate regionwide, and that any new supply would come at an extra expense that was only attainable to higher-income tenant households.

There is a wide gap between the average rents paid by all tenants, including those who've held onto their units for years in the city, and the average listing cost from the Rentals.ca data, with the City of Toronto putting the average for all one-bedroom apartments at $1,538 for 2023.

For renters in long-held units, losing their existing tenancy likely means shouldering hundreds more dollars per month if they want a similar rental unit in their current neighbourhood. There are real consequences when that cost is out of reach, says Rentals.ca's Paul Danison.

People will be shut out of housing and have to move someplace else," Danison said.

But even leaving the city doesn't hold the promise of affordability, the new data shows.

The average one-bedroom listing in Oakville went up 15.9 per cent in a year, to $2,268 per month. In Burlington, the same size listings were up 16.6 per cent in a year, to an average asking cost of $2,220. Similar trends held in places like Vaughan, Mississauga, and Brampton, with double-digit percentage increases. In Oshawa, the average one-bedroom listing was down 4.3 per cent compared with last February, though two-bedroom listings were up by 15 per cent.

Rents are growing fastest in some of these cities," Hildebrand said. When factoring in extra costs like commuting, he said tenants may not find any real savings by moving further afield."

There's not a lot of reprieve in the market - really, anywhere you look."

Victoria Gibson is a Toronto-based reporter for the Star covering affordable housing. Reach her via email: victoriagibson@thestar.ca