Toronto Luxury Rental Prices Decline by 4.8% in Q4 2023, Outpacing Major Cities
Discover the latest findings from Knight Frank's Prime Global Rental Index, showing a 4.8% drop in luxury rental prices in Toronto, attributed to supply and demand imbalances.
Luxury rental prices in Toronto experienced a significant decline of 4.8 per cent in the fourth quarter of 2023, surpassing all other major cities included in a recent report by Knight Frank. The Prime Global Rental Index revealed a 0.6 per cent decrease in luxury rental costs across the 10 cities analyzed, marking the first quarterly drop since 2021. The report attributed this decline to a persistent imbalance between supply and demand in the luxury rental market, which has persisted for over three years.
Liam Bailey, a partner at Knight Frank and the firm's global head of research, noted that while demand for luxury rentals remains strong, tenants are facing affordability constraints that limit their ability to continue bidding rents higher. Additionally, a slight improvement in rental supply has contributed to slowing rental growth in the market. Despite seeing price gains of 3.7 per cent earlier in the year, luxury rental prices in Toronto experienced the largest decline in the fourth quarter compared to other cities studied, with Tokyo and New York following closely behind with a 2.5 per cent decrease.
On the other hand, Sydney, Australia has seen the most significant growth in luxury rental prices, with a four per cent increase in the quarter and an 18.1 per cent increase year-over-year. The report attributes this growth to a housing shortage resulting from limited new construction, exacerbated by pandemic-related challenges, and a surge in demand driven by increased inward migration following a three-year lull. According to rentals.ca, the average monthly cost of a one-bedroom apartment in Toronto is $2,551, while a two-bedroom apartment averages $3,330 per month.
The luxury rental market in Toronto experienced a notable decline in the fourth quarter of 2023, outpacing other major cities in the study. Affordability constraints and a slight improvement in rental supply have contributed to this trend, while cities like Sydney have seen significant growth due to housing shortages and increased demand.
Toronto Luxury Rental Prices Decline by 4.8% in Q4 2023, Outpacing Major Cities
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