For years, it’s been a tough battle for renters living in Toronto and the surrounding municipalities. Rents have only been on an upward trajectory as supply was limited and demand was through the roof. But after a year of the COVID-19 public health crisis, Toronto and GTA rental real estate is now a renter’s market.
The turning point was last spring, when the coronavirus pandemic crippled the nation and forced governments to institute a plethora of new rules and regulations. One of the first items on the chopping block? The short-term rental market, affecting condo investors who relied on Airbnb and other short-term rental arrangements. The other factor was immigration restrictions, which have led to seismic drops in the rental market.
After a year of the COVID-19 public health crisis, Toronto and GTA rental real estate looks very different. Tenants have negotiating power and more options, which was unheard of before the housing boom in North America’s fourth-largest city. At the same time, condo owners are either selling their units or renting their apartments below the cost of their mortgage, resulting in both “seller’s fatigue” and “handcuffed sellers.”
A wide range of reports estimate that the monthly rent of a one-bedroom apartment in Toronto has fallen as much as 23 per cent year-over-year, with prices coming down as low as $1,500 in some of the most appealing locations in the city. Although this is still relatively high compared to the rest of the Canadian real estate market, it is a welcomed relief for renters who have been paying sky-high prices for the privilege of residing in a red-hot urban centre.
Right now, is it even worth it to buy a property when rent is at a multi-year low?
According to Canada Mortgage and Housing Corporation (CMHC), households are paying large premiums to own instead of rent. The crown corporation suggested that condo owners are paying 86 per cent more to own than rent in a purpose-built building. This is the highest premium paid in any housing market of the country, including Vancouver (56 per cent) and Victoria (13 per cent).
This begs the question: will the Toronto and GTA rental market return to pre-pandemic conditions in 2021?
Toronto and GTA Rental Real Estate Market in 2021
When it comes to the COVID-19 pandemic, there is light at the end of the tunnel in Ontario. New cases seem to be declining, more people are getting vaccinated, and the economy is starting to reopen. Even if a third wave strikes amid South African and British variants, the province and many of its sectors have shown their resilience to adapt, survive, and thrive.
Once the Greater Toronto Area returns to some semblance of pre-pandemic life, which officials are optimistic could happen in the third quarter of 2021, the rental real estate market could be one of the first beneficiaries. From restrictions being lifted at the Canadian border and students returning to the classroom, to the short-term rental market being given the green light again, the Toronto and GTA rental real estate industry could rebound.
PricewaterhouseCoopers recently released a report on the outlook for Canada’s housing sector. The multinational professional services network of firms predicts that the rental market will see benefits from a slowdown in home ownership and a backlog of immigrants. At the same time, it warned about the end of government income support and wage subsidy programs that could hurt tenants’ ability to pay their rent. The organization also said that more university students are likely to enrol in virtual classes instead of in-person learning, which would impact short-term rental activity.
The Toronto Regional Real Estate Board (TRREB) also anticipates a surging GTA real estate market, amid a strengthening economy and widespread vaccinations.
“The pandemic certainly resulted in an unprecedented year for real estate in 2020, but it hasn’t put a damper on the overall demand,” said Jason Mercer, TRREB Chief Market Analyst, in a statement. “Looking ahead, a strengthening economy and renewed GTA population growth following widespread vaccinations will support the continued demand for both ownership and rental housing. But over the long run, the supply of listings will remain an issue, particularly in low-rise segments.”
Put simply, the future largely depends on the vaccine rollout, the coronavirus variants, and the economic rebound.
Transformation of Toronto Rental Spaces?
Perhaps this is an opportunity to reimagine the rental market in Toronto and the rest of Canada’s housing market. With more people working and studying remotely, our homes have become multifunctional spaces to accommodate learning, exercising, entertainment and more. And as a result of this, our need for space has been redefined. PwC called this the “amenitization of communities,” whereby multi-purpose buildings allow new features to accommodate the new normal, such as videoconferencing rooms, dedicated areas for grocery delivery, and perhaps even additional green space.
Once the rental market returns to growth, developers might need to think about how to redesign apartment living for future generations, perhaps inspiring a new wave of rental demand.
Canadian home sales, prices surge to new record in March
OTTAWA (Reuters) – Canadian home sales rose 5.2% in March from February, setting a new all-time record amid strong demand in markets across the country, the Canadian Real Estate Association said on Thursday.
The industry group said actual sales, not seasonally adjusted, rose 76.2% from a year earlier, while the group’s Home Price Index was up 20.1% from last March and up 3.1% from February.
The actual national average selling price hit a new record at C$716,828 ($572,821) in March, up 31.6% from a year earlier and rising 5.7% from February.
($1 = 1.2514 Canadian dollars)
(Reporting by Julie Gordon in Ottawa)
Hot real estate market sparks warnings to potential buyers as complaints to regulator double
As home sales in the province continue on a dizzying trajectory, the province’s real estate watchdog and regulator are warning buyers to be wary of what they may be getting into.
The Real Estate Council of B.C. (RECBC) and the Office of the Superintendent of Real Estate said that in the first three months of 2021, they have seen an increase in inquiries and complaints.
Calls to the regulator were up 42 per cent over the previous year, while complaints, such as how offers were made and accepted, were double the number received in the same period in 2020.
“Buying a home is one of life’s biggest financial decisions. There are potential risks at the best of times, but with the added pressure and stress of the current market conditions, those risks are amplified,” Micheal Noseworthy, superintendent of real estate, said in a statement.
Planning on buying or selling a home this spring? With increased market activiy, its important to understand the risks, and we are here to help. Here are some tips to help you find the most up-to-date information before you make a decision: <a href=”https://t.co/7D8d5Of5XZ”>https://t.co/7D8d5Of5XZ</a>
The Real Estate Board of Greater Vancouver says sales in the region have continued at a record-setting pace.
Residential home sales covered by the board totalled 5,708 in March 2021, up 126.1 per cent from March 2020, when the COVID-19 pandemic hit, and up 53.2 per cent from February of this year.
Rural and suburban areas have experienced the biggest spikes.
For the past two weeks, Jay Park has been in the middle of the buying frenzy.
He and his partner are trying to upgrade from their one-bedroom apartment to a two-bedroom condo or townhouse in Vancouver.
“I wish we had done this a month or two ago,” he said.
Park put an offer on a $1-million condo, $4,000 above asking price.
“To entice the [seller], we put in a subject-free offer, but it wasn’t successful,” he said. “They accepted $110,000 over asking price that was also subject-free.”
The hot market has led to bidding wars. Some would-be buyers have even lined up outside for days to try to get a jump on a property.
Erin Seeley, the CEO of the council, is warning buyers to do their research and be aware of risks before making an offer.
“It’s really important that buyers have engaged with their lender before they’re making offers so they know how to stay within a reasonable budget,” she said.
Seeley said some of the complaints the council has heard from buyers is that they weren’t aware the seller has a right to take an early offer.
“And the seller was really in the driver’s seat about setting the pricing,” she said.
Aaron Jasper, a Vancouver realtor, advises clients to avoid cash offers and to include finance clauses even if it may mean they lose a deal.
“There’s a lot of frustration among buyers, feeling pressure to take some risk,” he said.
“You’re better to be delayed perhaps a year getting into the market as opposed to being completely financially ruined.”
Jasper also says realtors are limited in the advice they can give to clients on legal matters, home inspections, potential deficiencies with homes, and financing.
‘Caught up in the craziness’
Other tips from the council include seeking professional advice before making a subject-free offer or proceeding without a home inspection, and speaking to a professional to determine how market conditions may be affecting prices.
Meantime, people like Jay Park say they are still keen to buy. Park has more viewings scheduled and is optimistic.
“It’s a very exciting time for us, but I also don’t want to get caught up in the craziness and make a purchase that’s above our means.”
Source: – CBC.ca
Black Press Media introduces one of Western Canada’s best real estate platforms helping home buyers Find. Love. Live. that new home
Need an agent who knows the community?
Or, is it time to look for a new place to live, but you don’t know what’s on the market?
Whatever the real estate need is for residents in the communities of British Columbia, Yukon & Alberta, there’s a new way to do that one-stop shopping – by visiting Today’s Home.
The slogan for the site is “Find. Love. Live.”
“We want people to find their dream home, love it, and live in it,” said group publisher Lisa Farquharson.
Building on the success of Black Press Media’s niche digital platforms – Today’s Home brings the same wealth of knowledge and local expertise to the search for a home, be it buying, selling, or even just daydreaming about what changes you can make in the future.
Search hundreds of listings that local real estate agents have available.
The listings cover properties around the region, from a one-bedroom, one-bath condo for $339,900 to million-dollar acreages throughout the province of BC, Yukon, Central Alberta and beyond.
Click on a listing, and see not only the realtor handling the property sale, but links to his or her other listings and social media feeds. With the click of a mouse, take a virtual tour of the property, find the property’s walking score, and learn about nearby amenities.
There are links available to schedule a showing, or send the agent a comment or question.
Want to share a listing? When you click on the share button, you’ll actually send an attractive digital flyer of the prospective property, not just a link.
There’s even a button to help determine how much you have to spend, courtesy of the convenient mortgage calculator.
Plus, scroll down the page on Today’s Home and find a list of expert local real estate professionals who can answer questions or help with that home sale, Farquharson explained.
Today’s Home offers the advantage of the massive reach that Black Press Media has built throughout Western Canada with its network of community newspapers and online products. That allows the public to tailor real estate searches based on location, price, and other key factors while allowing real estate professionals to gain unprecedented audience reach with their listings.
Today’s Home will dovetail into the media company’s existing print real estate publications.
“Black Press Media has real estate solutions in print and now we can add in the digital component,” Farquharson said.
Watch for expansion of the Today’s Home platform in the near future, she added. That will come as Black Press Media adds a new component – the development community. Developers will be able to reach a huge audience when their projects are ready for presentation.
For information on Today’s Home, contact group publisher Lisa Farquharson at 604-994-1020 or via email.
Happy house hunting!
Source: – Aldergrove Star
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