Canada’s most expensive rental market is no longer Vancouver, as prices fall in the city. Numbers from rentals.ca show over half of Canadian cities saw 1 bedroom rental prices rise in June. The rise, combined with Vancouver’s fall, crowned Toronto the most expensive market.
Toronto Replaces Vancouver As The Most Expensive Rental Market
Toronto replaced Vancouver as the most expensive market in the country. Toronto had an average list price of $1,862 in June, up 1% from the month before. Vancouver fell just under to $1,833, down 5.4%. Richmond Hill, a suburb of Toronto, came in third at $1,721, down 0.7% from the month before. Spots 4 through 6 were also suburbs of Toronto, as last year’s condo gains transfer to secondary rental prices.
Canadian 1 Bedroom Rental Prices – June 2018
The list price of a 1 bedroom rental apartment in June 2018.
Source: rentals.ca, Better Dwelling.
Toronto Suburbs Are The Fastest Rising Rental Markets
The fastest rising markets were Oakville, Etobicoke, and Mississauga. Oakville reached $1,373 in June, up a massive 5.1% from the month before. Etobicoke reached $1,471, up 4.5%. Mississauga reached $1,435, up 2.5%. Yes, the area surrounding Toronto is seeing the fastest rising rental prices.
Canadian 1 Bedroom Rental Price Change – June 2018
The monthly percent change in list price of a 1 bedroom rental apartment across Canada’s largest 30 cities.
Source: rentals.ca, Better Dwelling.
The fastest falling rental prices were in Vancouver, Surrey, and Windsor. Vancouver’s $1,833 one bedrooms in June are a massive 5.4% lower than the month before. Surrey saw the average list price fall to $1,064, down 2.7%. Windsor prices fell to an average of $810, down 2.4% from the month before. All three of these markets are currently seeing falling real estate prices as well.
Generally speaking, the rental market trails real estate purchase prices. One month doesn’t make a trend, but it does show that rental prices can move in both directions. A correction in home prices, can lead to a correction in secondary market rentals prices.
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Some anecdotal detail…
Part of the reason the prices are skyrocketing is because of Airbnb. I rented 5 condos in downtown Toronto and have negotiated to pay more rent (ex. Asking $2200 for 1 bdrm, I offer $2450 to close the deal) so that I can get these units.
Check out buildings like 101 Peter..the rents have ballooned… You can see trends on condos.ca
Obviously these units generate roughly $5500-$7000 in revenue monthly.
There are dozens of people like me if not hundreds. This is causing a massive boost to prices.
Right? Why rent to a long term person when you can score an easy $2k with just 10 days per month? Even if they add a limit saying you can’t rent it more than half of the month, you still stand to make more on AirBnB if you can fill it.
There’s only so many people willing to use an AirBNB, but there’s more and more people warming up to renting their apartment this way. As the platform “matures,” the number of bookings will drop.
It’s already happening in some cities, from the AirBNB forum:
https://community.withairbnb.com/t5/Hosting/concered-about-sudden-drop-off-in-bookings/td-p/241248
AirBnB hosts in Toronto have missed the plot completely.
At the prices that they charge now, I’d rather pay 20$ more and stay in a hotel, which I have done when my family was visiting last time.
Same scenario with Paris for example, went in the summer and crappy airbnb rooms/flats ran nearly at hotel prices, no brainer for me.
airbnb started off well in some cities, but as these hosts start loosing their marbles and charging hotel rates no one will bother.
You are part of the problem causing skyrocketing rents. Airbnb should be outlawed in Toronto and the GTA and Vancouver and the greater Vancouver area.
If prices crash in Toronto, I doubt people will roll back what they’re charging.
Rents will roll back if a demand drop persists. I’ve been in other cities where a price correction has taken ten years to chop down rents. It often takes a very long time to go down, unlike going up. Many, many owners would rather keep a unit vacant than “give it away” with lower rent. Greed is a power motivator. Airbnb only makes it easier to hold out for your number.
In the event a really big correction occurs, like in the early 1990s, it usually becomes a better option to own (the monthly mortgage payments line up). Which is kind of funny, because that’s the only time people aren’t really interested in buying.
If house prices crash, you might see even higher rent prices. The problem is that some of the families will be pushed into foreclosure and they need to live somewhere. People renting already will keep renting, trying to wait out market uncertainty, waiting to buy at the bottom (if they even decide to buy). All that will increase competition for rental units. I’m not even going to address the fact that GTA is lacking real family sized units as for years developers were building product for investors / shoebox low quality / high speed production.
You can tell the vacancy rules are really helping in Vancouver. Once they went into effect, people that live overseas that kept occasional apartments they never visit, decided to sell or become tenants.
Developers that even sell overseas now offer to connected you with affiliated rental management companies.
This data is a bit off. Etobicoke, Scarborough, North York are all apart of the City of Toronto (Not GTA). Their numbers would bring down the average. Toronto would most likely still sit at #2 if thats the case. Nonetheless, high rents are high rents. Toronto is growing. I’m not too concerned about a crash in Canada or Toronto to be specific. They have been talking about a bubble bust since 2009. Very excited for the future. I’ve been here since 88 and can say we are headed, for the most part and if the politicians can put partisanship aside, in the right direction.
The data looks like it was adjusted to accommodate Toronto’s unusual “amalgamation,” so this would be the correct way to do it. Metro Vancouver (which would be similar to pre-1996 Toronto), would actually be much cheaper if you included their equivalent of Etobicoke. Ontario has a hard on for “efficient government,” which is just a political move to lower negative statistical downturns by diluting older data by blending it with historically under-performing regions.
Also, no one said Toronto was going to crash in 2009. In real terms, it was still cheaper than it was in 1990 – which is what you’re buying at today. Boomers just have such low education levels, they don’t realize they paid almost 4x their initial purchase price when you factor in interest levels. They’re thrilled that their homes tripled in value though. lol.
Sorry I do not believe that is true.
For a renter to even miss one month worth of rent is a huge loss.
Say a unit worth 1800$ a month, just let it sit for a few months your loosing 2,4,6k….It makes a lot more sense to drop it to 1500$ a month than loose thousands “just because”.
I’ve monitored this on Kijiji, people dropping prices because they can’t rent it out and getting desperate.
And if we are talking about condos that people have mortgages on, they simply can’t afford even 2 months of it sitting there.
Just rented 2bd Townhouse in Oakville. Not via Kijiji as this brings 2ng grade renters, but via MLS / agent with full background check. Had previous renters paying $1800 / month, new renters will pay $1980/month. We had 27 showings within 10 days. No problem with renters at all. So excuse me but if someone is dropping the price that means either apartment is really bad or they heavily overpriced.
Immigration to reach 360k/ year by 2020. Vacancy rate still 1% in Toronto? hmm
The immigration system *needs* that many people to support the fact that almost half of the country doesn’t work (a.k.a. generates no tax revenue, but consumes services).
Canada’s immigration minister is already admitting that the refugee system isn’t working out.
Vancouver, and Montreal are demonstrating that selling passports to the world’s wealthiest people don’t contribute to the country, they actually make it harder for locals.
That immigration target is either going to come down through the recession Canada will face over the next two years, from a sudden surge in housing costs (like it’s always been). People want to come to Toronto because it’s a nice place. When the average household has to pay more than half of their net household income for rent, they will stop coming.
Sounds like you need to buy before all the properties are bought by all those immigrants coming with suit cases of money to Canada.
If I were you I would probably consider buying two right now, before prices rise even higher, nothing gonna slow this market,
to infinity and beyond!
speaking like a true Realtor …