Thinking about renting a place downtown Toronto? You should probably think about becoming a buyer instead.
Rental rates over the past month have risen from $25 to $100 per month more than in May. The sale or lease price to the listing price now averages 101%! That means not only are most rentals attracting multiple offers, a tenant must be prepared to offer full price as a minimum or don’t even bother to submit the offer.
On top of that, landlords will be even more selective when choosing tenants. It’s not just your income that matters anymore. Your lifestyle will be scrutinized as well.
Please Read: Toronto Real Estate Sees Record New Listings, Yet Decline in Overall Sales..
In a sale, the one that offers the highest price is usually the winner. With tenants, you can offer the highest rent and still not get selected. So if you think the market is tight now, it will get even tighter down the road. Less new construction of condos and less condo buyers who want to rent their units out.
Let’s take a closer look at the numbers…
Condo units rented downtown were 7% higher in June than May. As condo sales slow, the rental market is now double the size of the resale market downtown.
It seems that living downtown is still a preferred lifestyle but it is also becoming more difficult to get a mortgage. Having to qualify at a rate of 4.64% when 5-year fixed rates are under 3% seems extreme. Currently, over 60% of borrowers elect this 5-year term.
Rental rates for the entry level studio or bachelor unit added another $25 per month and now sits at just over $1600 per month on average. The most popular unit is the basic one bedroom without parking, with over 300 units being leased in July at an average lease of $1850! When you add in parking and a den, the one bedroom now averages $2280.
The two-bedroom market, no parking and a den are now starting at $2600 per month. The high end of this market is $3300 per month. The three-bedroom market is now $4200 per month.
So, tenants and future tenants of Toronto: I beg you to ask yourself the question – Is it time to think about becoming a buyer?
– Written with files from Re/max Condos Plus
Guy Yarkoni has been a Real Estate professional for over twelve years. He is a licensed Sales Representative and Accredited Buyer Representative as well as a Member of the Luxury Home Institute. He is in the top 1% of Realtors selling condos in Toronto since 2007. His excellent sales record has been recognized with the induction into the Re/Max Hall of Fame, Re/Max Platinum Club Membership and in 2012 was credited as the #1 Sales Representative out of all Re/Max Condos Plus agents.
