Toronto condo rentals are seeing the most inventory in recent memory. Toronto Regional Real Estate Board (TRREB) data prepared by Toronto Realtor Daniel Foch shows rental inventory is still much higher than usual in September. Meanwhile absorption is failing to keep up, potentially explaining the abrupt rise of condos for sale.
Toronto Condos For Rent Rise Over 96%
Toronto condo apartments for rent are swelling to an unusually high level for this time of year. There were 7,901 units for lease in September, up 96.4% from the same month last year. This is the biggest September for rental inventory in at least half a decade. As for bigger months, only July and August have had more, over the same time period.
Toronto New Listings For Rentals
The number of new listings for rental properties in Toronto per month.Source: TRREB, Daniel Foch, Better Dwelling.
Toronto Condo Renters Rise Almost 45%
Toronto is also seeing a big uptick in the number of units leased. There were 3,477 leases signed in September, up 44.9% from last year. This would make it the biggest September in the past half decade. However, the increase isn’t nearly as large as that seen in new listings. This sent absorption levels back lower, as landlords outpaced renters significantly.
Toronto Rental Absorption
The number of rental leases absorbed by the market.Source: TRREB, Daniel Foch, Better Dwelling.
September Hasn’t Seen Such Weak Rental Absorption In A Long Time
Toronto condo rentals saw the rate of absorption make a sharp decline, after briefly picking up for a couple months. The rate fell to 44.0% in September, down from 59.7% last year. The drop reverses what looked like an improving trend. There’s only been two months lower than last month in the past half decade, and those were April and May of 2020, at the beginning of the pandemic.
Toronto New Listings Rental Absorption Rate
The ratio of new rental listings to rental leases accepted.Source: TRREB, Daniel Foch, Better Dwelling.
Toronto Condo Inventory Jumps To Highest Level In Years
Toronto’s soft rental inventory may be leading more people to sell instead. There were 5,621 new listings for condo apartments in September, up 77.5% from a year before. This is the most new listings in a single month for at least half a decade. When contrasted with new listening for rent, it appears to make a little more sense.
Toronto New Listings For Rent Vs Sale
The number of new rental listings to new listings for sale.Source: TRREB, Daniel Foch, Better Dwelling.
The increase in listings and sales volumes is expected to persist for the near term. This trend is due to slowing population growth, and an influx of recent condo apartment completions. With immigration, the main driver of population growth, expected to be stalled for the next year, it’s difficult to see this trend reverse.
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Many rental condos are fully financed so if they’re not rented it costing a lot to keep them.
From where do these virtual owners find that kind of free money?
Correct. You’re still on the hook for mortgage and maintenance fees. Property taxes also sting a little more too.
Being a landlord is easy when the market is tight. Not so much when it isn’t.
This is even funnier when you see how many threads on Facebook groups of new landlords that were negative cap, trying to sell because they can’t afford to carry it empty, but would lose on transaction costs.
There’s a reason professional landlords haven’t bought in the past two years, and even listed for sale. Regardless of the pandemic, the risk was building up to systemic levels.
Just watch the government intervene to prevent true price discovery in the rental market. You know it’s going to happen. Toronto is already considering bailing out the Airbnb parasites and using the empty units to house the homeless at taxpayer expense. Meaning non-working people who pay nothing will have nicer accommodation than many working people forced to pay even higher rent as a result of the government mopping up supply. Nice being middle class in Canada isn’t it.
Welcome to socialist/communist Canada.
Rents are so high because of government interference in the housing market. Who wants to build rental units when the government of whatever stripe give over control to people who have no skin in the game.
Also do you know how much fees and city surcharges are added to a rental or condo unit? Try in excess of $100,000. The real parasites hang out at city hall.
So quit your job and be homeless if you think it’s a better deal.
Its time for prices to come back atleast 50%, if the government steps in to save the speculators we will know where the problem is.
That sounds awesome except then nobody gets their pension. The mortgages on all those condos and overpriced real estate make up a third of the pension funds and the floats for insurance companies. They’re forced by law to buy that inflated garbage because. If the bubble pops it wipes out the retirement system. It’s the same deal in the USA that’s why it’s going to be inflation not deflation. They’ll start sending everyone checks to pay their rent before they let it pop.
I wasn’t expecting to retire for another 25 years. (Or ever really.) I don’t care at all. Let them all drown.
Government should pay full rent plus $2000 a month to the landlord from taxpayers pocket to avoid condo crashes.
Sounds like time for a up rising lol.
But seriously the government using tax payer money to save speculators is a crime against all Canadians especially the young. Liberals will lose a whole generation of young Canadians.
Yes , that is what exactly government doing .
Click on canada mortgage bond you see they increase it by %2000, or 20 times.
You are out of your mind. If you can’t afford to carry the mortgage and expenses on your rental property then sell. There is no way you are gong to see a penny of tax payer money to bail your ass out on an an investment.
No , I am not out of mind , Please look at data
Yes , that is what exactly government doing .
Click on Canada mortgage bond you see they increase it by %2000, or 20 times.
Thats what they probably did through CERB already.
Not a chance. You took a risk and there is no way you are getting a bailout from tax payers money for betting on condos. Welcome to the worlds 2nd largest casino. Sell or lose your shirt. In capitalism some times you win and sometimes you lose. Too bad.
Throw in a new corvette as well.
Real estate should never Be allowed fall in Canada….. lol
Let it crash back down to 350k for 2 to 3 bedroom condos.
Anymore is a RIP off. I bought a triplex 12 years ago for 230k 12 years later there like 700k absolutely ridiculous. How are young families suppose to feed themselves. This is a disgrace and greed which is driving prices up as well as uninformed people purchasing for way more than the price to actually have it built.
Wondering where the people are going…
it would be interesting to calculate the overlap between sales and rentals as the % overlap might be a good proxy for the level of desperation in the market…
oh, Stephen!? a project for you!
If condos in Toronto crashed 50%, I still wouldn’t buy. The industry has been set up to fail.
In order to avoid crash in real estate prices and even create a bigger buble and to widen wealth gap between rich and poor, i think canadian government should give such privilege landlords to defer their mortgages including their investment properties, buy all kind of mortgage bonds from banks to reduce their default risk to none so that canadian banks can lend more at lower interest rate and give 9 milyon ppl 2000 monthly regardless if they lost their job or not. Make sure renters have enough money to pay their rent to their landlords and kids of wealthy individuals have extra money to spend on toys. Give all business owners 40K free money to be used as downpayment to buy more real estate etc.. list goes on on. Perhaps as a result despite the one of the biggest recession in canadian history , canada would be able to increase the disposable income per capital 14% and ensure to continue sitting on top of world real estate bubble . That would be great for wealthy people , is not it ?