It was a turbulent two years, but 2022 is proving that Toronto’s rental market has bounced back and is now exceeding pre-pandemic levels.
The Downtown to Humber Bay area market shows over 2,100 condo units were leased on MLS in May. Currently there are only 1250 active listings for lease. The volume of new listings however is down 24% year-over-year, suggesting that there is not enough inventory coming to the market. This will further inflate market demand and rental rates.
Did you know that 2021 produced a 30-year record high for purpose-built rentals completions? This was up over 65% over the last five years, and yet even as we entre the endemic period, Toronto’s vacancy rates are below the 3% neural level we should be aiming for. Currently, the estimated rental housing supply is around 15 days worth.
According to a study from Urbanation this demand is only going to be further exasperated by the forecasted immigration rates for the city. With rental demands estimated to grow by 26% by 2031, this means a demand of at least 475,000 more rental units (in addition to what is already planned) are needed over the next nine years.
So, what does this mean for those looking to rent in the coming months? The best advice I can give is to be ready. I suggest you hold off on giving notice to terminate an existing lease until you have lined up your new place. It’s also helpful to try and coordinate for your moves to overlap, allowing for a few days in both places so you aren’t competing for moving trucks and elevators all on the same day.
A few more reminders to ensure you’re ready to go:
· Be prepared with a printed copy of a full recent credit report from an accredited consumer credit reporting agency like Equifax or Transunion, not just screen shots from your phone.
· Have your letter of employment and pay stubs confirming income.
· If you don’t have sufficient supporting documents, have a co-signer ready to provide similar papers as well, ensuring they understand the responsibility they are taking on.
To date, the market shows a 5% increase in rental prices between February to May this year, which is only expected to further inflate. Going forward, this market will only get tighter as we approach the peak July and August months, when students will add to the demand for condos.