Mississauga rent prices soar above parts of Toronto

Thestar.com
February 1, 2019
Graeme Frisque

The cost of living in Canada’s sixth largest city continued its upward trend in the fourth quarter of 2018, with the monthly average rent for a one-bedroom condo now surpassing some areas of Toronto.

According to the most recent condo rental tracking data from the Toronto Real Estate Board (TREB), the average rent for a one-bedroom apartment-style condo unit in Mississauga between October and December of last year climbed to $2,000.

A supply shortage of available rental units is driving up prices in Mississauga to the point the cost for a two-bedroom unit increased from $2,169 in the first quarter of 2018 to $2,385 to close out the year.

That represented an 11.5-per-cent increase compared to the first three months of 2018, when a one-bedroom unit could be had at an average monthly cost of $1,794. In neighbouring Toronto, the average rent for a one-bedroom condo in the east end came in at $1,954 in the year’s fourth quarter.

In the city’s west end abutting Mississauga, the average monthly cost was only slightly higher at $2,023 per month. However, a unit in Toronto’s central zone still outpaces Mississauga by approximately 10 per cent at $2,241 per month.

“The Greater Toronto Area has seen significant growth in its economy throughout 2018. It has become a primary destination for companies in various industries who are attracting younger talent who have a desire to live in the region,” said president Garry Bhaura in TREB’s quarterly analysis.

“This desirability has contributed to the continuation of historically-low vacancy rates, strong competition between renters for available units and, as a result, very strong growth in average rents,” he added.

The cost of renting in Mississauga has increased significantly over the past four years. In the first quarter of 2015, the average cost for a one-bedroom condo sat at $1,511 per month. That cost has risen $489, or 32.3 per cent in just 48 months.

Only bachelor units held pace throughout 2018, actually seeing a slight decrease in average rental cost from $1,625 in the first quarter compared to $1,617 in the fourth quarter.

The monthly cost for a two-bedroom increased from $2,169 in the first quarter, to $2,385 to close out the year. Similarly, a three-bedroom apartment-style condo costing an average of $2,423 to start 2018 ended the year more than $200 higher at $2,650 per month.

According to TREB, a supply shortage of available units is driving up prices. In an effort to encourage development of new buildings, last fall, the Ontario government lifted rent control rules from new units unoccupied prior to Nov. 15, 2018.

Rent controls were left in place for existing tenants already under a lease. TREB supports the provincial government’s decision, believing it will eventually lead to the desired outcome of increased supply and more affordable rental rates in the long-term.

TREB reaffirmed its opposition to rent controls in its latest quarterly rental report.

“It is conceivable that rent controls could prompt some investors to consider selling their units and investing the proceeds in another asset class. This scenario could obviously compound an already problematic rental supply issue in the GTA,” said Jason Mercer, TREB’s director of market analysis.