Rental Market Report from Toronto

Short term rentals Toronto

According to the Rental Market Report from Toronto Regional Real Estate Board (TRREB), the average rental price for a one bedroom condo apartment was $2099 in Q4 2021, from $1845 in Q4 2020, an increase of +13.7%. This resulted from several reasons including a year over year decline of available units for rent. Since the onset of the Covid-19 pandemic, the brief contraction in the rental market has since recovered and has accelerated into double digit growth and nearing pre-pandemic highs. With a tightening of availability of rental supply, this will ultimately increase rental prices going forward.


1.

[1.] Sourced: TRREB (2022). Rental Market Report Fourth Quarter 2021

Now let’s extract some statistical data derived from the City of Toronto (Current City of Toronto Average Market Rents & Utility Allowances). For our purposes, we will focus primarily on data pertaining to One- bedroom apartments.

According to 2021, Average Market Rent (AMR) figures, which are used to set Affordable Housing monthly occupancy costs, show that the cost for a one bedroom apartment will be on average $1431 per month.  In order for an individual to qualify for Affordable Housing, an applicant’s household annual gross income cannot exceed to be more than four times the annual rent of the unit being applied for. In this situation, the applicant applying for the one bedroom apartment condo cannot have an annual household income greater than $68,688. ($1431 average market rent x 12 months x 4)

Under the Affordable Housing units whereby a tenant pays for any utility cost, they are entitled to a utility allowance deduction from their monthly occupancy cost (Includes if tenants pay each utility separately or as a bulk/suite-metering). The total amount for (Hydro, Heat, Water and Hot Water) amounts to $90 per month. So the total net cost per month for a one bedroom condo apartment with basic utilities (under Toronto Affordable Housing) would cost on average $1341 per month.

2.

[2.] Sourced: City of Toronto (2021), Current City of Toronto Average Market Rents & Utility Allowances

In this section, we would like to apply our perspective analysis to the data provided above. For all intents and purposes, this is for general discussion and purely our own thoughts and opinions.

We all know the situation that we currently live in where the rental price, particularly in Toronto, continue an uptrend with no reason to believe that it will change course in the near term. The reality is this: rental prices will continue to rise due to short supply of available rents and with a continual rise of home prices. Real estate investors looking to acquire rental property at higher purchasing price will face an increase in annual carrying costs from a higher expected mortgage payment (all other things being equal). This increase in carrying costs would ultimately be passed down to the end user, the tenants, in the form of higher monthly rental costs.  

This now makes the ability to live in the GTA and (specifically Toronto) extremely difficult and out of reach for many individuals. Even with the Affordable Housing monthly cost, once you factor in other costs such as internet/TV, parking (if not included in the monthly rent), the true cost now increases to somewhere closer to $1600 not $1341. We use the Affordable Housing as an example to provide a conservative average cost but we know this is rarely the case especially with the rental supply currently contracting. I think it is safe to say that the actual price in Toronto is much higher and with projections in the 2022 to be higher even so.

So what are the alternatives? Well for one, shared rooming or private room rentals can offer individuals a more affordable way to still live in the city and maintain their current lifestyle. It is a great solution for those individuals seeking to balance work and personal life without experiencing financial stress. The co-op or shared space way of living has many positive benefits from reduced cost of living, increased social skills, enhanced co-operative skills and adopting responsible habits. Furthermore, it may assist in building stronger teamwork and collaborations with co-workers. These personal living experiences can sometimes reinforce and produce positive outcomes in the workplace environment.

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The standard one year lease term doesn’t suit every individual, particularly those new to the city or relocating from another country. People that are arriving from a new place may want to explore different locations before deciding on a more permanent residence.

Some individuals would only require a certain duration to meet their near term residential needs. For example, a student on a four month work placement or a professional on an extended business trip would require shorter term duration of less than the typical one year term. There are flexible housing options to cater to these individuals such as subleases, month-to-month leases, school term leases, and transferable leases.

Although this would bode well for these individuals seeking a short term lease, it wouldn’t be in the best interest for the landlord. Finding the right tenant can be stressful enough for a landlord and taking on a lease term any less than one year would be far too great of a risk to assume. The uncertainty lies between when the current tenant vacates and when the next new tenant will occupy the residence.

At Homesgate, we can accommodate a person looking for a short term rental Toronto or a room for rent Toronto. Our tenant placement division takes care of this uncertainty because we have fully verified and credible candidates ready to be placed into any one of our available Homesgate Rental properties. We provide great flexibility for all of our Homesgate members. You no longer need to sign the long term one year contract. We can provide you exactly the duration that you need and we can even accommodate an extended stay if required.

Another key benefit of being a Homesgate member is our relocation option. Suppose you are currently living at a Homesgate Rental unit and your employer has transferred you to another office location much further away from your current residence. Rather than having to deal with a longer commute, our relocation option will allow you to transfer to another Homesgate Rental unit closer to your new work location. There may be a difference in price based on the unit and/or location. This option provides a great benefit because the individual can save commuting time.

Also, consider not having to find new accommodations outside of Homesgate Rentals. Imagine having to go through the verification and application process. It is an extremely time consuming and daunting task. Once you are verified as a Homesgate member, you won’t need to go through the process again.

We will take care of everything. So just pack your bags, relax and enjoy your new residence. Welcome Home!

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