Toronto landlords swipe right as rents near hipster Brooklyn's
Toronto
TRYING to find an apartment in Toronto is a lot like online dating, only more demoralising.
Ask Kin Lau. Normally, landlords would be swiping right on him. He's got a perfect credit score and a good job. But last week he drove 40 minutes to check out a one-bedroom-only to discover another suitor had snapped it up first.
"Do people just not go to see the place before renting?" said Mr Lau, a 25-year-old accountant.
Renting in Toronto is the hardest it's ever been. Home prices have doubled since 2008, so buying is out of reach for many people. That's pushed Toronto rents to record highs, approaching those in hipster Brooklyn and London. Potential tenants are so desperate they're driving the streets looking for rentals and creating web profiles, similar to dating bios, to attract landlords. And prices are likely to keep rising given new laws that builders say discourage construction.
"I can't take clients with mediocre credit anymore, because landlords don't even look at them," said Conrad Rygier, a broker at Keller Williams Realty Inc. "I've seen a lot of frustration. Downtown is just absolute craziness." Investors, lenders and Canadians looking for places to live are wondering how much longer the home-price boom can last. Although values have fallen 17 per cent since March, compared with a 3 per cent gain in the same period last year, the average price of a detached home in Toronto is still near a record at C$1.39 million (S$1.5 million).
Rental supply is down to two weeks, meaning it would take that long to rent everything in town, and average rents have hit an all-time high.
Toronto mostly has three types of rental properties: privately owned condominium suites, rental buildings with a central landlord, and space in a private home. Supplies of all three are squeezed.
There are 1,125 condominium units available for rent in the city of 6.2 million people, down 13 per cent from last year, according to second-quarter data from Urbanation Inc. It's also a record low for the period in Toronto.
Rents jumped 11 per cent in the last year, blowing past the C$2,000-a-month threshold for the first time, to C$2,073, and nearing Brooklyn-level prices. In the Crown Heights section of the New York City borough, landlords ask an average US$2,089 for a one-bedroom, according to June data from Brooklyn brokerage MNS Brands Inc. In greater London, average rent for new units in May fell to £1,502 (S$2,671), according to HomeLet.
For newer rental-only towers, the vacancy rate reached a low of 0.1 per cent in the second quarter. In April the province of Ontario introduced the most sweeping rental rules in a quarter century. They cap rent increases at 2.5 per cent and extend rent controls to apartments built after 1991, which builders say will constrict new construction. It will likely keep renters climbing over one another to get a date with a landlord. Mr Lau, the accountant, said he had four landlords cancel on him in two days.
Landlords are ecstatic at their good fortune. Jeff Medley listed his downtown Toronto "nothing special" 600-square-foot (56-square-metre) condo on a Wednesday. On Thursday, the winner of a bidding war agreed to pay C$1,850 a month for the place he'd offered for C$1,800.
Unless there's an influx of supply or a slowing of demand, the market will only become more unhinged, said Mr Rygier, the Keller Williams broker. "I was going to say, 'If it's a reasonably priced suite,'" he said. "But that's an oxymoron these days." WP
