The stock in resale units is dropping in Toronto, meanwhile rentals are at the lowest vacancy rate in seven years, according to the Canada Mortgage and Housing Corporation. Meanwhile, new units are continuing completion, but the tightening market has pushed the average rental rate up 1.8 percent for a 2-bedroom unit.

Even with dropping housing prices, first-time buyers now make up only about 40 percent of the marketplace, according to CMHC, a drop from 47 percent in 2007. “A number of factors contributed to the lower rental vacancy rate, including more moderate home ownership demand, steady in-migration, changing demographic trends and a dip in full-time jobs for young people,” states the group’s latest Rental Market Report.

While renters wait for prices to drop further, the cost of renting has still increased below the rate of growth for inflation and incomes. “The gap between the average principal and interest payment for a condominium apartment and the average rent for an apartment likely widened more for larger unit sizes,” the report says.

Toronto Condo blogger Iris Li with Re/Max, writes, “with more new condos coming on to the Toronto real estate market, the rental vacancy rate should increase as more tenants become home purchasers.