According to Urbanation Inc.’s third quarter condo and purpose-built rental market report, the number of GTA condo units rented through the MLS system reached a new high of 8,398, an 18-per-cent increase year-over-year.

The average cost of rent grew by two per cent annually to $2.49 per square foot. Available purpose-built rental units completed since 2005 averaged a cost of $2.34 per square foot with an average vacancy rate of 0.6 per cent. The number of purpose-built rentals under construction grew by 76 per cent from the second quarter to 6,523 units, reaching its highest level in over 25 years.

Condo leases increased by 11 per cent year-over-year, marking the second consecutive quarter that leases increased at a faster rate than listings. Although supply from new projects is increasing quickly, turnover rates from existing units have declined, leading the ratio of leases-to-total listings to reach 84 per cent.

Although rental market conditions are tight, underlying growth in rent was minimal. Average rents in the Toronto core remained the same, while total GTA same sample rents increased by 0.4 per cent. Several lower cost suburban markets saw rent growth of three to five per cent.

In the third quarter, monthly rents averaged $1,850 based on units that averaged 743 square feet. This number is down from the average monthly rent of $1,870 for 767 square feet from one year ago.

“Rental demand continues to strengthen due to quickly rising housing prices and increased migration into core areas of the GTA,” said Shaun Hildebrand, Urbanation’s senior vice president, in a press release. “These trends should continue to support the market amidst record levels of condo completions and growing purpose-built construction.”

Adding to the 6,523 condo units that are currently under construction, there is a total of 10,117 purpose-built units that have been proposed for development. A total of 3,820 new units were proposed in the third quarter of this year, which is a 41 per cent increase over the total proposed inventory for the second quarter of 2015.