The dream has always been to give up that tiny Toronto apartment and trade it in for a Toronto mortgage that you can call your own. Whether that mortgage is on a condo or a single-family is another story altogether; but that dream is still very much alive. Unfortunately, Toronto’s housing market is jam-packed and now, so is the rental market, too. And that narrowing vacancy is causing some pretty nasty things to go on inside this market.
Bidding wars are one of the biggest drawbacks that this decreased vacancy rate has caused; and they’ve caused such a stir that some concerned parties have also questioned the legality of it. Taking the situation to Ontario’s Ministry of Municipal Affairs and Housing, these parties wanted to bring an end to people fighting each other over that second-floor apartment. The Ministry though, decided that this was not an illegal act and so, it’s one that’s likely to continue happening. And believe it or not, it’s because there’s a lack of housing in the city that could be used for renting.
Shaun Hildebrand of Canada Mortgage and Housing Corporation says that to understand why the situation is where it’s at, you only need to look at the vacancy rate (shown below,) and the numbers of properties compared against the number of people that need them.
Mr. Hildebrand says simple that, while a number of condos are built each year just for the rental market, it’s still not enough to meet the demand.
“Of the 15,000 condos built every year, about a third of those become rental properties,” he said. “But there’s 10,000 new households entering the rental market every year.”
This means that there’s still about 5,000 units a year that need to come onto the market. Of course it’s not just condos that make up Toronto’s rental market; and the other measures are stepping up to help fill the void. More Toronto homeowners are actually seizing the opportunity and turning finished basements into rental suites; and a few purpose-built rentals are also being constructed. But it’s not enough. The number of vacancies going down means just one thing: the number of renters is going up. And along with them, so are rental prices. With bidding wars being legal, Torontonians shouldn’t be surprised to find that it could be just as hard to find a rental unit as it is to find a home in the city.
Hildebrand doesn’t see any signs of demand letting up; and he certainly doesn’t think that the price of rent is going to ever come down. But he says, it’s not all bad news. He says that the number of renters in any given city is directly correlated to the growth and dynamics of the city. When the former is up, the latter two are as well.
“Immigration levels are going to improve. Employment opportunities are going to improve. People’s earnings are going to improve,” he says.
What do you think? Are you currently trying to rent in Toronto and finding it impossible? Or have you capitalized on the situation and turned part of your home into a renter’s palace? Let us know, either by using the comment section below or by Liking us on Facebook!