Immensely positive prospects for employment will fuel prolonged demand for rental residences in Toronto, according to a new analysis by Marcus & Millichap.
The Toronto Multifamily Spotlight report for November 2018 estimated that 43,500 households will be formed over the next 18 months, largely due to the influx of skilled talent magnetized by the singular strength of the city’s tech sector.
“Intel, Microsoft and Uber are just some of the companies to recently announce plans to grow their footprint and bring on new hires, solidifying Toronto’s reputation as one of North America’s top innovators in tech and other industries,” the report stated.
Investor demand, which pushed average prices up by 10% annually (up to $260,100 per unit), has not slowed down despite regulatory adjustments implementing rent controls.
“Strong rental demand and improving property performance will keep sales activity elevated this year, particularly in areas near employment hubs with transit connectivity.”
Read more: Notable price growth did not deter GTA condos’ sales strength
Single-family pricing is also contributing to further rental demand, as the benchmark price for the asset class at $863,500 in September, far beyond the reach of a significant proportion of first-time buyers.
“With a limited number of starter homes on the market, apartments have been virtually filled to capacity with a vacancy rate under 1%, keeping rent growth in the mid-single-digit range and motivating the development of new units,” Marcus & Millichap said.