Canada

Toronto Condo Rental Prices Drop, Vancouver Flat In August

Cooling Canadian real estate prices are dragging rental price growth. Numbers from the rental platform rentals.ca show 1 bedroom prices increased in markets with slower price gains last year. However, last year’s red hot real estate markets are experiencing slow to negative growth – especially around the Greater Toronto-Hamilton Area.

Canada’s Most Expensive Rental Market Falls

The usual suspects topped Canada’s most expensive rental markets – Toronto, Vancouver, and Richmond Hill. The average Toronto 1 bedroom rental went for $1,851 in August, down 0.6% from the month before. Vancouver’s average rate hit $1,839, up 0.3% from the month before. Richmond Hill, a suburb of Toronto, reached $1,736, up 0.9%. For context, Vancouver experienced a massive drop the month before, crowning Toronto the most expensive market.

Canadian 1 Bedroom Rental Prices – August 2018

The list price of a 1 bedroom rental apartment in June 2018.

Source: rentals.ca, Better Dwelling.

Fastest Rising Rents Are Toronto’s Suburbs

The fastest rising rents were located in Toronto suburbs, and Alberta. Etobicoke, an administrative region representing the west end of the City of Toronto, reached $1,572 in August, up a massive 6.9% from the month before. Red Deer, Alberta saw the average 1 bedroom rate reach $994, up 3.6%. Mississauga, the city directly west of Toronto, reached $1,477, up 3%. The Greater Toronto area has been very volatile with rents over the past couple of years, as real estate prices undergo some discovery.

Canadian 1 Bedroom Rental Price Change – August 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.

Toronto Was 4th Largest Drop For Prices

The fastest falling rents had no discernable pattern, but two regions were located in the Greater Golden Horseshoe (GGH). Oakville, the affluent Toronto suburb, saw rents drop to $1,346 in August, down 1.9% from the month before. Kitchener, the other GGH region, fell to $1,105, down 1.2%. For those curious, was the fourth largest drop of the 30 markets, as the GGH does some price discovery.

Canadian rental prices are in a holding pattern, while real estate prices undergo some price discovery. Last year many major markets west of Ottawa saw huge price gains in real estate, dragging rental prices higher with it. Now that many of those markets are giving back some of those gains, the rental market appears to have joined the price discovery game as well.

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18 Comments

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  • Mossy 2 months ago

    Everyone who reads this blog needs to go visit the NY times website today, where there are a series of articles going over the impact and lessons of the 2008 financial crisis.
    https://www.nytimes.com/interactive/2018/09/12/business/media/hgtv-housing-mortgage-crisis.html?action=click&module=Well&pgtype=Homepage&section=Business%20Day
    Interesting that the NY Times cries “bubble” in the current US real estate market, but our own esteemed MSM refuses to use that word wrt our market.

    • Q 2 months ago

      The use of the word bubble isn’t necessarily helpful, it would likely make the impact on the surrounding economy worse. A slow fall may be annoying to homeowners and buyers, but it softens the recession that typically accompanies it.

  • Andrew 2 months ago

    Didn’t this website teach us that prices are supposed to drop at around this time of year? Didn’t this website tell us only to use YoY comparisons to avoid this bias? What gives?

    • Ian 2 months ago

      I actually don’t think rentals.ca existed last year, so that would explain monthly data. Secondary market wasn’t tracked very well either, with the CMHC being the primary source and doing it by survey. now There’s a community of scrapers that aggregate all sources in Vancouver and compare.

      I’m guessing starting next year we’ll have annual data. It sucks, because right now the news is reporting board data in places like Toronto, which are real estate agent listed places. Not a realistic look at rents in any way.

      Sucks to have no data from prior years, but it sucks even more to have no data at all.

    • Kara 2 months ago

      I never got don’t use month over month comparisons from this site, but I did get that there’s different readings used for different reasons. There’s never any single read that applies to every single data type.

      Now, I don’t know what the correct way of looking at rental data would be, but I did think it was interesting on last month’s article that prices in Vancouver dropped over 5% in a single month. Seems highly unusual.

    • Joe 2 months ago

      Haha, even if they had YoY data, they won’t show it because I can guarantee you it was a huge increase not a month over month drop of -0.6%. I am a landlord so I know first hand.

      Also, headlines say Toronto drop (-0.6%) but Vancouver flat (+0.3%)…hmmm so if 0.6% is a drop, why is 0.3% not a rise? 😉

  • Rick Abrams 2 months ago

    Shouldn’t people wonder why housing prices and rents are increasing when the population is not increasing? The population increase has to be among those who do the buying and renting. Thus, lots of babies do not increase demand. Either there is a lot of immigration or a lot of young people are reaching the home buying age. That is NOT happening. So why would prices and rents increase?

    • Brad 2 months ago

      While the price increases are definitely unwarranted at these levels, we’ve raised the immigration cap/intake and have seen 323k (2016), 272k (2017), and the current aim is 310k (2018) and 340k by 2020. These numbers are on top of our slow domestic population growth.

      I’m not arguing that the prices are correct, but just showing you that there is actually a ton of immigration… between a 0.7-1.0% population increase per year.

    • rx 2 months ago

      Demand determines price and demand doesn’t necessarily require a population increase. Most people I know own multiple properties- mostly acquired over the past decade.

      There was a poll today on msn.ca and last I checked most of the over 7000 respondents said they own their home (without a mortgage). I assume when people have paid off their mortgage, they were looking to invest elsewhere. There must be a lot of well off Canadians

    • H 2 months ago

      What are you talking about? Canada has the highest per capita immigration quota in the Western world. Perhaps only New Zealand is higher. The Liberals want to eventually swamp Canadian municipalities with 450K immigrants per year, displacing Canadians and driving down wages (and of course spiking house prices).

  • Contrarian 2 months ago

    It is not a trend, yet.

  • Jo 2 months ago

    Toronto Was 4th Largest Drop For Prices – It dropped 0.6% month over month…how about YoY? i bet it increased a ton but why doesn’t BD show it?
    Is 0.6% a huge drop? I see prices in the rental market still insanely high.

    Also, the headlines “Toronto Condo Rental Prices Drop, Vancouver Flat In August” and this statement “The average Toronto 1 bedroom rental went for $1,851 in August, down 0.6% from the month before. Vancouver’s average rate hit $1,839, up 0.3% from the month before. ”

    -0.6% qualifies as a drop but +0.3% is flat? BD can present data that shows the weak housing market and I believe it but doing this on rental market is a tad over bias negatively. Anyone else agree?

    • AgentX 2 months ago

      Please stop pretending you know what you’re talking about, it’s embarrassing for both of us. Fact of the matter is that rents are down from last month, if you waited one month, prices were cheaper.

      Additionally you CAN’T COMPARE DATA THAT DID’T EXIST LAST YEAR. Unless you’ve been scraping data and cleaning rental data from last year, there’s nothing to compare it to. All of the other rental data is from the MLS, which are only agent let units. In which case you’re paying for an agent as well, for your whole tenancy. Not the same as owner rented units.

      • Joe 2 months ago

        Hoohoohoo…Agent X, see link SCE posted. You are embarrassing yourself. Rents are down 0.6% last month….everyone can read that. Only a uninformed/completely out of the market person would think that rents are actually down YoY. DATA that doesn’t exist…lol…keep dreaming.

  • SCE 2 months ago

    Awesome. Up until August, rents were up 14% YoY and one month of decline and good ol’ bear BD is trying to make it look like the rental market is crashing. FAKE NEWS!

    for your reference:
    http://blog.padmapper.com/canadian-rent-trends

    • Joe 2 months ago

      Exactly…I bet Agent X or bears would try to shoot this data link you posted down. Come on man…it’s so obvious that rents in Toronto have skyrocketed since last year…unbelievable that people are denying this and saying that “CAN’T COMPARE DATA THAT DID’T EXIST LAST YEAR”. Even if data is a subset of the larger data that doesn’t include owner rented properties, you must be really insane to believe that rents are down.

  • Joe 2 months ago

    For those wondering which house was listed as sold for $1, it was 104 Fallingbrook Rd which was listed and taken down a number of times. Note this “Brokerage remarks: Listing Agent To Be Present At All Showings – Pls Allow 4 Hours Notice. L/A Is Related To Seller, Please Bring Disclosure.”

    Maybe this was why…

    • Joe 2 months ago

      hmm…this comment was meant for the post “Toronto Real Estate Board Reminds Agents They Shouldn’t Give Fake Sold Info” not sure why it appeared here.

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