Luxury rents in Toronto fell 4.8% in Q4: report

Luxury rents in Toronto fell 4.8 percent in the fourth quarter of 2023, more than any of the 10 largest cities in the world it studied, a new report found.

Knight Frank's Prime Global Rental Index found that luxury rents fell 0.6 percent across 10 cities in the fourth quarter, marking the first quarterly decline since 2021.

“Like most residential rental markets, the luxury segment has been characterized by a chronic mismatch between supply and demand for more than three years,” wrote Liam Bailey, partner at Knight Frank and the firm's global head of research.

“However, while demand remains strong, the ability of tenants to continue to command high rents is limited by affordability constraints. This, coupled with a modest improvement in rents, will limit the pace of rental growth.”

While luxury rental prices in Toronto rose 3.7 per cent in the fourth quarter, prices fell 4.8 per cent in the other cities surveyed.

The next highest cities were Tokyo and New York, both down 2.5 percent.

Overall, Sydney, Australia is seeing the sharpest growth as prices rose four per cent in the quarter and 18.1 per cent year-on-year.

“The housing shortage is primarily due to restrictions on new construction and the consequences of pandemic-related challenges,” the report said. “Compounding this problem is the increase in demand due to a significant increase in internal migration after three years of calm.”

According to rentals.ca, the average price of a one-bedroom apartment in Toronto is $2,551 per month, while the average two-bedroom apartment is $3,330 per month.