Toronto Condo Rental Rates on the Rise!
The Toronto Real Estate market was changing in 2017, with the first six months experiencing sky rocketing year-over-year price increases of 30% - prior to the Fair Housing Plan, implemented by the Ontario Government in April, as an attempt to cool down the red hot Toronto Real Estate Market. Prices dropped immediately after the government regulation. Detached homes took the biggest hit, with values falling 5.3% from April to May. However, the city's condo market was not deterred, outpacing price growth of all other home types, rising 14.1% to $532,000 by the end of 2017.
THE FACTORS BEHIND RISING TORONTO CONDO RENTAL RATES!
The main contributing factors towards the strong rental market is population growth, booming economy, and limited supply of rental units, according to Tim Syrianos, President of the Toronto Real Estate Board.
The number of condominiums leased in the fourth quarter of 2017 declined 3.4% from the same time the previous year. This suggests the market is experiencing 'landlord market' conditions. In other words, the vaccancy rate is less than 1% for condo apartments in fall 2017. A decrease in availability translates to less agreements signed and higher rental prices.
LESS RENTAL SUPPLY EXPECTED IN 2018!
It would be a red flag if the number of condominium apartments available for rent increases while the number of signed lease agreements declines, leading to weakening demand which further leads to potential price decreases.
Jason Mercer, TREB's director of market analysis, says that last years stellar condo price gains, coupled with the new rental regulations, may encourage current unit owners to cash in, further reducing rental supply.
NO SLOWING DOWN AHEAD!
As condos continue to outpace other forms of housing like detached and semi-detached homes, this uptick in prices will continue to be passed onto rental prices.
The most affordable way to get into the condo market is through pre-construction condos where you purchase the condo at a fixed price, and take advantage of the price gains during the construction period. Keep in mind, you'd be taking advantage of the price grains while having no cash outflow.
Have Questions regarding Real Estate? The Iris and Evelyn team are here to help! With their countless years of buying and selling Real Estate Properties, their experience and knowledge can help you make the right choice!
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