Is everyone moving to the 905?
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Speaker 1: This next article’s from the Toronto Star. It is headlined, “Renters pushed to the 905 as vacancies hit 16-year low.” This is talking about the latest stats from Urbanation tracking the rental market. Always interesting to see what Urbanation has to say on the market, and this time is no exception.
A few points that jump out to me, you want to be tracking these things as a condo investor. Average time in condos has gone up to 23 months, so the turnover’s going down. This is the Fair Housing Plan in effect, rent controls in effect. People are not moving as much.
A couple years ago, it was actually six months shorter. Now it’s 23 months, an all time high. People are staying in their condos. The other thing is overall rentals. The number of units rented is actually down 11% compared to the year before, but rentals in the 905 are actually up 26%. Huge jump in the 905 rentals compared to the overall market, which is actually down.
Very interesting to see, so forget about being able to buy a house or buy a condo in Toronto. You can’t even afford to rent one anymore. People are moving to the 905 to rent, which is a very interesting trend to continue to watch.
The other thing is that overall monthly rents are up 9.1%, but if you look in the Downtown Core, rents are up 12.4%. So Downtown Core once again, outperforming other markets in the GTA. What do you do as an investor? As a condo investor, what do you do with all this information?
Well, there’s a few things that you can do with it, but the number one thing I think, is that you want to keep buying. Keep adding to your portfolio over time, and that’s going to allow you to continue to take advantage of these rising rents.
If you just have one condo, and you’re locked in that condo and time is going by, because of rent controls, you’re not going to be able to take advantage of these rapidly rising rental rates. If you’re an active investor who’s continuing to buy, continuing to add to your portfolio, you’re going to always be taking advantage of the new rents that are continually going up.
The other thing is of course, focus your portfolio on the Downtown Core. It’s always going to do better than other areas, but it is also okay, and it might be time to consider adding in the 905 area as well. We’re seeing rentals jump up there, and I suspect over the next year, we’re going to see prices in the 905 jump up as well, and start to catch up to downtown. Again, affordability is driving people to the more affordable areas, so it’ll be very interesting to watch that trend develop this year as well.
Finally, we are expecting a larger number of completions this year, so at some point, Urbanation is anticipating that the rental rate increases will slow down somewhat from their crazy 10, 12% rates that they’re at. They’re still saying even conservatively, they’re saying 4 to 5% rental increases this year, even if we do get a massive amount of new supply into the market. We’ll watch that trend this year as well. Hope you enjoyed this video, and we’ll talk to you soon.