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RE/MAX (July) | Toronto Real Estate: Rental Trends – RE/MAX News

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When the COVID-19 pandemic forced the country to hit the pause button, there was, unsurprisingly, a great deal of speculation regarding the state of the Toronto real estate market: Canada’s largest. Would this red-hot real estate market finally ease up, or would it continue as normal? Like the typical Canadian during this unprecedented situation, the Toronto real estate has been resilient.

As the province of Ontario reopens and Toronto tries to regain some semblance of normalcy, property values have been steadily rising. But while the focus had been on the buying and selling of properties at the onset of the coronavirus, a dramatic shift in the rental market is also turning heads and generating buzz.

After years of dramatically low rental inventory, The Six has recently seen a decrease in demand and a jump in supply. This has contributed to downward pressure on rental rates, something that many thought would never happen again in Toronto. Is this a permanent rental trend in Canada’s biggest market? Or is it a blip on the radar?

Toronto Real Estate: Rental Trends in 2020… and Beyond

Is a re-balance finally taking place within Toronto’s rental market after such a long stretch of climbing prices and low inventory?

In the second half of June, the number of new leases signed tumbled 27 per cent year-over-year, up from the 41% decline in May. According to Urbanation, a real estate research firm, new listings increased by 74% in the first half of June.

The organization says that the average condo rent slipped 1.3% from May, and it is down at an annualized rate of 5.7% to an average of $2,313.

This downward trend is also cropping up in other statistics mapping trends within the rental market. New data from Padmapper, which connects tenants with apartments, revealed that the average one-bedroom unit in Toronto cost $2,180 per month in June. This is down from the all-time high of $2,500 in October 2019. It has also been estimated that the rents of furnished listings have tumbled by 10% since the start of the pandemic.

This pattern could persist heading into 2021 as more newly built units come online and additional construction projects get underway. Urbanation reported that more than 20,000 units could be available in the open market by the end of 2020.

Moreover, there are other pandemic-related factors impacting the trends within this market. One factor that has contributed to the cooling of the Toronto rental market has been the slowdown in immigration, with permanent residents and students abroad reconsidering their plans. Plus, as more classes move online, many students have decided to move back home.

Short-Term Rentals in Toronto’s Rental Market

In April, Queen’s Park banned short-term rentals during the duration of the coronavirus crisis. Ontario declared that short-term rentals would only be allowed for individuals who needed accommodations during the emergency period. Although the province permitted the short-term rental of properties to resume, the disruption may have helped the long-term rental market.

Over the last couple of months, the Toronto condo rental market saw a surge in listings and a decline in renters. This meant more competition between landlords – and a pullback in prices. Landlords and investors were listing their short-term vacation rentals as long-term units. The spike in listings more than doubled the condo rental inventory.

The impact of Airbnb and other short-term rentals has been one of the key drivers of higher rents due to the decrease in supply. According to a June, 2019 study by David Wachsmuth, a professor in urban studies at McGill University, Airbnb eliminated 31,000 units from Canada’s long-term rental market.

A lot of industry observers are waiting for Canada Mortgage and Housing Corp. (CMHC) to publish a report on the state of the nation’s rental market. The country’s top mortgage insurer recently released a grim outlook on the national real estate market and forecast that prices could fall as much as 18% over the next 12 months, with a rebound not seen for a couple of years. This triggered some disagreement from the real estate industry.

For now, the province is still recommending the short-term rental industry to adhere to the health and safety guidelines.

“Owners should consult health and safety guidelines related to the tourism and hospitality sector when considering how they can reopen their doors to guests,” the province said in a statement. “Operators and guests should continue to practice physical distancing, wear a face covering when physical distancing is a challenge, and wash hands frequently.”

Renters: Enjoy the softening market, while you can!

Toronto real estate has been a challenge for many, however recent softness in the Toronto rental market may continue for the next several months. Rental supply is climbing, while demand is sliding due to lower immigration levels and the economic downturn. It is, however, only a matter of time before the Toronto rental market rebounds. Until then, urban renters can finally enjoy a reprieve, even if it is only a couple of hundred dollars.

Every cent counts when you’re living in North America’s fourth-largest city!

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

The Canadian Press. All rights reserved.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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