In April of this year, Ontario’s provincial government introduced its Fair Housing Plan on the Toronto Rental Market, which had a non-resident speculation tax as well as widened rent control measures that now include buildings built after 1991.
Following the new policy announcement, Urbanation found that the number of condo apartments being leased rose 12 per cent, hitting a record high, and that rental prices grew 11 per cent, surpassing an average of $2,000 for the first time. Vacancies are now near zero.
Those that have a rental unit that meets their needs & budget are now also holding them longer. There is far less turnover with the average length of stay rising to 21.5 months from 18 months just months earlier, quotes Urbanation. It’s cheaper to stay where you are then try and hunt for a new home at a higher price!
We are not building enough rental supply in the GTA and the new rental control measures are going to damper supply even more!
Purpose-built rental models (apartments owned by the Developer with rent only suites) no longer make sense as a business model for developers. A perfect example of this is the Kingly, the latest residential development at King & Portland. This Allied owned building was originally planned as a 130-unit residential rental building that has since switched to resale in light of the announcement of the Fair Housing Plan, with suites now starting at $1,000/ s.f.
The average condo in the GTA is now $554,069 (+24%) versus the same time last year. Though buyer intentions have shifted towards the condo market due to affordability, there are a lot of buyers waiting on the sidelines with a “wait and see” attitude hoping that Toronto’s Market will cool off dramatically. If you’re not buying, you’re renting (or living in your parent’s basement).
And, effective today, new Mortgage Rules state that new borrowers of uninsured mortgages will have a stress test applied in order to obtain mortgage approval. We’ll be talking about this in detail later this week – so keep an eye out for more information.
BIDDING WARS ARE THE NEW REALITY
With limited supply and increasingly high demand for rental properties in the City, bidding wars for leases have now become commonplace and expected, often going to the highest bidder, and mirroring what we have been seeing on the residential resale side.
With a tightening market, and intense competition, timing is key. Having a Realtor who can set you up on property matched or notify you as soon as a property comes out within your criteria not only eliminates the leg work, but it helps you stay ahead of the curve to ensure you are maximizing your opportunities and no relevant listings fall under the radar.
When it comes to offering on a property that elicits multiple offers, having a professional who can represent you in your very best light in addition to negotiating your best interests as a tenant, can prove more valuable than the offer price. A skilled agent can also build rapport with the listing agent to help keep you apprised of how many offers are on the table and what the Landlord is looking for in a candidate. This can assist in managing expectations and establish how to best structure your offer.
HERE’S WHAT OUR RECENT CLIENTS HAVE TO SAY ABOUT THE TORONTO RENTAL MARKET
We chatted with three recent Fox Marin leasing clients, and asked them what frustrated them most about the Toronto Rental Market, and (no surprise) they all agreed that the steep competition was the hardest part of their rental search. Most were surprised by the high prices, and no one expected units to result in bidding wars.
Despite these frustrations, all of our survey clients had an overall positive search experience thanks to the help of a Leasing Agent. Madison said, “We would not have found the unit we are in, which we love, without your help. We would never attempt to find a place without enlisting the help of a Leasing Agent. Your knowledge, access and assistance were invaluable and made a stressful process more manageable”.
WHY ARE YOU RENTING WITHOUT A REAL ESTATE AGENT?
We live in an age where you can essentially do anything yourself with the help of a Youtube video, mobile apps, and online tools so it is little wonder why many individuals don’t consider working with a Realtor on their lease acquisitions; but, with the current state of the market, it is in every ones best interest to have a knowledgeable Real Estate Professional on their side to help navigate through the Market, and these are just a few reasons why:
- Better access to listings as soon as they come out
- Clearer expectations on pricing, timelines and competing offers
- An expert to negotiate your best interest
- In-depth understanding of contracts and tenant rights
- It’s absolutely FREE (remuneration for leasing services is the responsibility of the Landlord!)
IT’S A BIG CITY, BUT WE’LL HELP YOU FIND YOUR WAY
Ready to start your rental search? We’d love to chat with you!
With this competitive market, timing is everything. In order to make your rental search easier, we strongly suggest that you gather the necessary documents before you begin looking at properties. At the bare minimum, it’s best that you have the following:
- Rental application
- Letter of employment
- Reference x 3
- Credit check with Beacon Score
- Government-issued photo ID
