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Rental Market Continues to Soar

I wrote a few months ago that it was a good time to be a landlord, particularly if you are in the condo rental game. Supply seems to be at an all time low, vacancy rate is zero or close to it, and bidding wars from renters are driving rental rates up far faster than sale prices.

I wanted to share with you another anecdotal story to illustrate just how crazy the rental market is right now. A colleague of mine recently listed a unit at VU (112/116 George Street – Adelaide and Jarvis). It was a 1 bedroom, 1 bath unit on a mid-level floor and it included 1 parking spot (floor plan below). There was nothing remarkable about this unit other than it was a rather large one bedroom. It was NOT on the preferred side of the building facing the downtown skyline, rather it had an east exposure.

Asking price was $1950/month! For a 1 bedroom on Jarvis! I thought they were being way too aggressive on the asking price but when I called my friend who was the listing agent, he told me that in just 2 days on the market the property attracted 5 offers and went for $2050/month! $100 over the asking price. Wow.

This is just one story of hundreds. Ask anyone who has tried to rent a condo downtown it the last 6 months how their experience was. Downtown Toronto is booming. All signs continue to point towards increased rents and better returns to come for investors who are buying today. Those who have their heads stuck in the sand and keep saying things like, “they are building too many condos’ are totally out of touch with the reality of how tight the rental market is downtown.

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9 Responses to “Rental Market Continues to Soar”

  1. Rick

    I believe that is hype. I’ve been in the rental game for about 5 years now and rents have held steady. I rent out a new building furnished one bedroom and it doesn’t even get $1700

  2. anon

    Perspective is everything…I find this disgusting…$2050 for a 1 bedroom on Jarvis? Looks like you have to make more than $100K just to rent a place downtown now, or be fiscally irresponsible maybe and spend more than you should on housing…WHAT GREAT NEWS, YAY.

  3. Andrew la Fleur

    Rick, care to share your address?

  4. Jianmin Liu

    Hi Andrew,

    Great post! Wondering if you can provide some insight whether this is happening in mid-town area, like Yonge-Eglinton.

    Thanks

  5. Tony

    This is a much bigger 1 bedroom than a typical one in a newish building. 749 sf is usually a 2 bedroom, or even a 3 bedroom in one of the pre-constructions. It also has extra large windows.

    I’ve noticed (anecdotal evidence), that the best prices for rentals are from owners directly. Its not too hard to find a $1700 1 bedroom in a better neighbourhood – on a subway line (Bay/College) if you look at the bulletin boards in each building, or go on kijiji or something. Of course, I can’t say the bulletin board listings weren’t bid up after the fact, but $1500-$1700 is definitely advertised for 1 bedrooms, depending on if parking is available. I’m talking about buildings less than 5 years old.

    Its just speculation on my part, but the agent listings are inflated because the owner has to pay them a cut, which I heard is about 1 month’s rent.

  6. Adam

    Andrew is right on the ball. I leased a 2br at Front and Jarvis and had 8 interested ppl in less than 2 weeks. Of the 3 I narrowed it down to none of them had any hesitation paying $100 over asking. It went for $2100 for 825sfqt with a locker. Parking was extra. Still a good value In my opinion. Something like that in King West would be $2600 a month.

  7. adam

    Yes, that’s alot for a 1brm but, at current condo prices, that’s still cash flow negative.

  8. cdr108

    sorry ALF, but this is just hype …. nothing spectacular.

    it’s a large 749 sq ft 1 bedroom unit with parking with an unobstructed (for now) east exposure.

    at $1950/m (less $100 for parking) for 749 sq ft = $31.24 per sq ft / year …
    that’s just within the lower range of what new construction projects are renting for $30-36 per sq ft / year.

  9. Roland

    How much are amenities worth to a potential tenant? I own a unit that doesn’t have amenities and pay about 200 less in condo fees than if it had amenities. Is the gym and concierge worth 200 bucks?

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