Real Estate

Toronto rent is skyrocketing

  • Last Updated:
  • Feb 18th, 2018 7:13 pm
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Deal Addict
Feb 22, 2011
2541 posts
2328 upvotes
Toronto
burnt69 wrote:
Feb 13th, 2018 2:05 pm
Absolutely. But there's a lot of brand new luxury units that are going into the 'averages', hence, the average rent is increasing, but individual rents are not.
Do you think people are idiots and not looking at comparable units? It's not hard to jump on Kijiji, Craigslist or Realtor and see prices for rent are up A LOT.

If they aren't up then since when were 1 bedroom condos downtown $2000? Or basement apartments in SCARBOROUGH over $1000.

Just 1.5 years ago I told my wife she was crazy for thinking we could get $1750 for our place DT. Now a comparable place is over $2200 easily. And they are having bidding wars for those.
Deal Addict
Oct 6, 2015
1300 posts
676 upvotes
Silver1234 wrote:
Feb 13th, 2018 2:21 pm
So how much rent are those luxury units going for? Can you show us some listings to back up your claim? By the way one of my friend is paying $1800 for a 1 br at Don mills and Eglington and it is a 20 yr old building.
Not hard to go onto the various rental sites and see people asking $3k+ for such units. Without utilities included.

When you add a large number of such units to the rental stock, the average rental unit has changed significantly over time. This is responsible for a good chunk of the alleged 'increases', rather than increasing rents on individual units.

If rents were really increasing at such dramatic rates as quoted here, you'd have a lot of visible social unrest and homelessness. Yet that doesn't seem to be happening. Because its not.
Member
May 9, 2017
430 posts
442 upvotes
burnt69 wrote:
Feb 13th, 2018 2:39 pm
Not hard to go onto the various rental sites and see people asking $3k+ for such units. Without utilities included.

When you add a large number of such units to the rental stock, the average rental unit has changed significantly over time. This is responsible for a good chunk of the alleged 'increases', rather than increasing rents on individual units.

If rents were really increasing at such dramatic rates as quoted here, you'd have a lot of visible social unrest and homelessness. Yet that doesn't seem to be happening. Because its not.
Rents have been going up for every size condo.

https://www.torontorentals.com/blog/ave ... since-2000

Social unrest ... huh?
Deal Addict
Oct 6, 2015
1300 posts
676 upvotes
NotRobot wrote:
Feb 13th, 2018 2:52 pm
Rents have been going up for every size condo.
Size != quality.

There's a big difference between renting in a brand new luxury tower where there's a swimming pool, hot tub, a concierge, etc., nice marble finishings, etc., versus some older unit which is more utilitarian in nature.

Your link does not disaggregate changes in quality from changes in rent.

What was luxury in the early 2000s is much closer to 'average'. In fact, a friend of mine used to rent a unit just overlooking SkyDome/Rogers Place, for around $2200/month in 2001. The similar unit is available for only slightly more these days (ie: basically an inflationary adjustment). It would be considered middle-of-the-road these days, not high-end as it was at the time.
Sr. Member
Sep 14, 2007
699 posts
158 upvotes
Luckyinfil wrote:
Feb 13th, 2018 12:04 pm
It's not a disaster, landlords just found a loophole. It's time to close that loophole and ensure rent controls persist even with different tenants.
It's not like they "found" the loophole. When they were deliberating over the possibility of rent controls, tons of articles already came up proving it would have the opposite effect as seen in other markets where rent control was attempted.
It happened exactly as the warnings suggested, rents went up. Wynne knew what would happen, it was just a political move to pander to ignorant voters thinking it would keep their rents low.

Please elaborate what you think would be the ideal rent controls, say it's your government, what would your ideal rent control policy be?
Deal Addict
Feb 22, 2011
2541 posts
2328 upvotes
Toronto
burnt69 wrote:
Feb 13th, 2018 2:56 pm
Size != quality.

There's a big difference between renting in a brand new luxury tower where there's a swimming pool, hot tub, a concierge, etc., nice marble finishings, etc., versus some older unit which is more utilitarian in nature.

Your link does not disaggregate changes in quality from changes in rent.

What was luxury in the early 2000s is much closer to 'average'. In fact, a friend of mine used to rent a unit just overlooking SkyDome/Rogers Place, for around $2200/month in 2001. The similar unit is available for only slightly more these days (ie: basically an inflationary adjustment). It would be considered middle-of-the-road these days, not high-end as it was at the time.
That is such a load of BS. Name me one building in all of Toronto that has not had rent go up over the last 5 years and I will find listings that show they have.
Deal Addict
Sep 12, 2006
1238 posts
232 upvotes
rjg4235 wrote:
Feb 13th, 2018 2:30 pm
Do you think people are idiots and not looking at comparable units? It's not hard to jump on Kijiji, Craigslist or Realtor and see prices for rent are up A LOT.

If they aren't up then since when were 1 bedroom condos downtown $2000? Or basement apartments in SCARBOROUGH over $1000.

Just 1.5 years ago I told my wife she was crazy for thinking we could get $1750 for our place DT. Now a comparable place is over $2200 easily. And they are having bidding wars for those.
It's a perfect storm right now for downtown landlords. Affordability decreasing, incomes stagnant, young people opting to live downtown and walk to work.

Who knew that 3 years ago, an investment condo would work out better than an investment house? Rents are going up for sure, after so many years of stagnation. I remember my buddy moved to Yonge and Finch in 2011 and was paying $1400 for renting a 1-bedroom, that was pretty constant in that area till early 2016. Now it's around $17-1800 there I think. 20% in 2 years.

However, I don't have a crystal ball, but I have a feeling that those who invested this year at 1000/sq.ft hoping to rent out are going to be disappointed with their decision.
Deal Addict
Feb 22, 2011
2541 posts
2328 upvotes
Toronto
alex_d10 wrote:
Feb 13th, 2018 3:09 pm
It's a perfect storm right now for downtown landlords. Affordability decreasing, incomes stagnant, young people opting to live downtown and walk to work.

Who knew that 3 years ago, an investment condo would work out better than an investment house? Rents are going up for sure, after so many years of stagnation. I remember my buddy moved to Yonge and Finch in 2011 and was paying $1400 for renting a 1-bedroom, that was pretty constant in that area till early 2016. Now it's around $17-1800 there I think. 20% in 2 years.

However, I don't have a crystal ball, but I have a feeling that those who invested this year at 1000/sq.ft hoping to rent out are going to be disappointed with their decision.
A lot of people honestly. Why do you think people were buying them up? Anyone who was paying attention to the city was seeing how it was intensifying. Jobs and people are moving to the city like never before.

Then you had people on RFD for the last 5 years laughing saying people are idiots for buying a shoe box in the sky for $350k when it's cashflow negative. Now those condos are worth $600k and pulling in tons of positive monthly cashflow.
Jr. Member
Dec 4, 2016
112 posts
37 upvotes
alex_d10 wrote:
Feb 13th, 2018 3:09 pm
It's a perfect storm right now for downtown landlords. Affordability decreasing, incomes stagnant, young people opting to live downtown and walk to work.

Who knew that 3 years ago, an investment condo would work out better than an investment house? Rents are going up for sure, after so many years of stagnation. I remember my buddy moved to Yonge and Finch in 2011 and was paying $1400 for renting a 1-bedroom, that was pretty constant in that area till early 2016. Now it's around $17-1800 there I think. 20% in 2 years.

However, I don't have a crystal ball, but I have a feeling that those who invested this year at 1000/sq.ft hoping to rent out are going to be disappointed with their decision.
Oil price crashed around early 2015, taking the loonie with it. It took a year for the weaker dollar to cause a booming job market in Toronto and drive up rents. It's a one time effect, unless oil and loonie keeps crashing to ever lower levels. If oil goes back to 120+, we can see a reversal of fortunes.
Deal Addict
Sep 12, 2006
1238 posts
232 upvotes
BlueSolstice wrote:
Feb 13th, 2018 4:45 pm
Oil price crashed around early 2015, taking the loonie with it. It took a year for the weaker dollar to cause a booming job market in Toronto and drive up rents. It's a one time effect, unless oil and loonie keeps crashing to ever lower levels. If oil goes back to 120+, we can see a reversal of fortunes.
How exactly do you propose a higher loonie will decrease demand? Is everyone going to lose their jobs and move back in with their parents? Are people going to move back home to (insert small town here)? Are immigrants going to stop choosing Toronto?

I see rents tapering off (affordability ceiling) but not decreasing by much, if at all. Demand is still growing and will only decrease if we see a boom of purpose-built rentals to undercut the condo landlords.
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User avatar
Sep 8, 2007
5076 posts
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Way Out of GTA
alex_d10 wrote:
Feb 13th, 2018 5:03 pm
How exactly do you propose a higher loonie will decrease demand? Is everyone going to lose their jobs and move back in with their parents? Are people going to move back home to (insert small town here)? Are immigrants going to stop choosing Toronto?

I see rents tapering off (affordability ceiling) but not decreasing by much, if at all. Demand is still growing and will only decrease if we see a boom of purpose-built rentals to undercut the condo landlords.
Not going to be much purpose built rentals near term 1) more profit upfront to sell as condos 2) provincial govt is untrustworthy in terms of rental laws each time further eroding landlord rights
Jr. Member
Dec 4, 2016
112 posts
37 upvotes
alex_d10 wrote:
Feb 13th, 2018 5:03 pm
How exactly do you propose a higher loonie will decrease demand? Is everyone going to lose their jobs and move back in with their parents? Are people going to move back home to (insert small town here)? Are immigrants going to stop choosing Toronto?

I see rents tapering off (affordability ceiling) but not decreasing by much, if at all. Demand is still growing and will only decrease if we see a boom of purpose-built rentals to undercut the condo landlords.
Higher dollar makes the workforce in Toronto more expensive, leading to fewer jobs. Same way low oil prices lead to lower housing prices and lower rents in Alberta. Or the impact of federal government layoff in Ottawa. That said, I'm somewhat bullish on Canadian RE as a whole, and not calling for 50%+ crash. Note that 50% crash would only get Vancouver and Toronto to a few years ago, if you look back in time.
Sr. Member
Feb 23, 2009
505 posts
550 upvotes
Oshawa
rjg4235 wrote:
Feb 13th, 2018 3:15 pm
A lot of people honestly. Why do you think people were buying them up? Anyone who was paying attention to the city was seeing how it was intensifying. Jobs and people are moving to the city like never before.

Then you had people on RFD for the last 5 years laughing saying people are idiots for buying a shoe box in the sky for $350k when it's cashflow negative. Now those condos are worth $600k and pulling in tons of positive monthly cashflow.
Not positive cash flow I you buy now for $600K.
I would rather have a real house with a yard in the 'burbs for $600K.
Others will realize the same soon also.
History repeats it's self.
Member
Jan 3, 2017
308 posts
211 upvotes
Super_Chicken wrote:
Feb 12th, 2018 11:48 am
Lmao, anyone renting a unit from over 5 years ago is well over cash flow positive. Anyone from the last 5-20+ years ago is likely making pure profit at this point. They can easily afford to have the unit sit vacant and not care. Relatives own a triplex in Toronto outright, the first unit covers all the bills, the other 2 are profit in the bank. Due to health issues they've had one of the units vacant for over a year now. They are still making profit on it.

Just because a small few new landlords are over leveraged doesn't mean the whole market is. As rates go up they will be underwater and will adjust based on their unique scenario.
This. I want to buy but I haven't bought a new property in about 6 years simply because It doesn't make any sense right now. Even getting a duplex to have positive cash flow these days is pushing it.

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