Though home sales have fallen in the largest Canadian city, the rental market is hitting a 25-year high with about 7,200 units under construction at the end of 2017 and more than 33,000 units proposed by developers.
Bloomberg reports Toronto’s condo sales market saw “double-digit growth,” edging out prospective buyers into the rental market, which in turn pushed up monthly rents by more than 9 percent. In combination with an all-time low vacancy rate of 0.3 percent, the rental condo market appears to be the best game in town.
Toronto’s soaring rental market can be explained by new regulations controlling rent and owners reselling their units instead of leasing to make bigger returns — last year Bloomberg finds only 8.3 percent of rental units turned over, the lowest rate in five years. The compounded factors explain why Toronto was classified by UBS as a “vulnerable market,” where investors are betting big despite the threat of correction.
The people feeling the pinch are prospective tenants: Ricky Ferguson and his girlfriend have been looking for a condo renting at about $400 under the average monthly rent of $1,730 since October and the hunt is frustrating to him, he’s considering some drastic measures.
“Honestly, I’ve had so much trouble finding a place, I don’t think people should be allowed to own properties,” he told Bloomberg. “Bring on the socialism.”
[Bloomberg] — Erin Hudson