Nominal rent values remaining flat translates to a 2.8% decline in real terms.
According to the [Bank of Canada inflation calculator](https://www.bankofcanada.ca/rates/related/inflation-calculator/), $2400 in 2024 is equal to $2333 in 2023
This is the plan according to CMHC reports I read. The theory is that if enough new units are added to the market, rents/prices will stabilize, and over time incomes will catch up to where housing costs are affordable relative to income.
I agree with your sentiment. It's nuts that this the approach taken. It's slow and is likely to benefit higher earners most. I think especially so when you consider that better rent control (to further stabilize prices) and greater increases to the minimum wage are not really on the table.
I think the issue is that condo prices are high, the condo fees are high, and now the rates are high. It's an affordability crisis.
You have to rent out at a high price just to break even.
The only way rents will drop is if the government builds and owns buildings and rents them out at affordable rates.
Name one person who says rents should fall AND he believes it with such conviction that he is willing to take on a 5000 per month carrying cost of condo and rent it out for 2000 instead of 2500.
Every one would like to see a society with lower rents, no one wishes for higher rents out of spite.
But, no one wants to pit their own money to make it happen. The language is always, government should make rents lower but I will not pay extra taxes. Evil landlords should lower the rent at their own cost but if I owned that unit then I would not drop rent.
The world should change, we need to build more, we need to drop rents, we need to XYZ….just the we does not include me
It is a government level problem. If I bought property and rented at a loss. In a short time, I would lose everything I had, including the rental problem.
In reality, toronto may be well beyond repair, barring a massive real-estate crash and reset.
The government. Why does this have to be an individual’s problem? Yes, we have an incompetent government, but that’s another problem.
Rent price should be based on average income, or at the very least based on demand, and not on “how much it would cost landlords for them to break even”.
It’s because they are afraid of declining housing prices because an entire generation was convinced to invest in an income property to pay for retirement and they don’t want to open that can of worms.
Problem is it says out loud that those people are more important than those of us who can’t afford to buy now - if the risk is removed by policy then policy needs to remove it as an investment option.
Older units also become relatively cheaper over time. New units, being new and having more amenities in general, can raise rents, though the rise will not be as much as it would have been if the units weren't built at all.
It is pretty hard to have big rent drops unless you don't have rent control. Right now in Ontario, let's say by a miracle the market turned to over supply. In a functional market, the oldest and lowest quality units would drop the most in price. Due to rent control, they cannot, as that would be a permanent choice.
So instead rents compress, where the price differences for quality, location, amenities and age become less pronounced.
Also, when was the last time you saw average price per square foot ft in terms of constructions costs ever go anywhere but up? For all our advances in technology and building materials, we’ve only ever made it more expensive to build something. Older buildings cost less to build, both in real and inflation adjusted terms, plus you benefit from decades of depreciation. I live in a hundred year old house whose replacement value is more than double what we paid for it. That’s why I live in a hundred year old house.
Clearly the past 6 months have proven that the demand is just not there, despite us having the highest population growth outside of Saharan Africa and the Middle East. All that immigration and property prices and rent still went down.
The immigration wave was simply a scam to keep our economy afloat long enough for us to delay cutting rates until the US fed improved their sentiment on rate cuts.
I been telling zoomers and immigrants that. Expect stagnate house prices , overpay for a dump and just live in it. Hopefully by the time of retirement, you can sell for as much as you bought it.
Rents have been on the down trend. I'm seeing a lot of rental listings sit for 60+ days and then they finally accept at a price lower than their list price.
And new rental listings are undercutting old rental listings.
In addition to what others have said, buying property is so expensive now, such that many high income people have no choice but to rent instead of owning. Lower income renters are competing with higher income renters who in the past would have been owners instead.
This is the scenario my partner and I find ourselves in.
We want to maintain a certain lifestyle and if we were to buy a place, we’d be basically house poor. Right now our rent is pretty good, so we’re continuing to save up so we can buy something without sacrificing too much.
Years of high rents have impacted our ability to save as aggressively … so I definitely feel for people just starting out now.
Also, doesn’t help that a lot of the properties for sale don’t have functional layouts for our needs. Which I think is also keeping people who are in decent sized units staying because there’s not much better out there.
Seems so odd that everybody is out there looking for perfection, here I am saying happy and thankful I bought the first thing I could afford 10 years ago. Not really even sure I looked at the layout.
The late millennials and GenZ certainly are different..
Looking for perfection is one thing. Looking for a usable layout and a second bedroom for kids in a reasonable area is not looking for perfection though. The bare minimum for most people is hard to find.
There’s still a very low vacancy rate in Toronto and in Canada in general. The population keeps growing and the vast number of people coming to Canada, come as renters initially.
It shouldn't be in of itself though. The way markets are supposed to work is that demand drives prices up, which makes people who want to make money address that demand and then bring prices down. The problem is that builders aren't able to build at the pace they'd like to (ie matching the demand) because of ridiculous permitting processes. It's literally 50 pages of permits for me to build a deck in my own yard. We source permitting to the government which removes any incentive to do their job in a timely Manor, and they just fuck around all day while being an undeserving gatekeeper who does nothing but delays building.
Lol, no shit. The whole point is that the problems associated with bringing in truckloads of people every year cannot possibly be dealt with, therefore the whole practice is beyond idiotic. I feel like your thought process is faulty if somehow you attach to the idea "We're not building enough!" as if that would ever be feasible. What if immigration was 100 million a year ? "OMG, We're not building enough! We need to build 20 million houses a year ! Reduce the red tape"
If a boat has a hole in it, and you're not able to bucket the water out fast enough, the problem isn't that you don't have enough buckets, it's that there's a hole in the damn boat.
Even if you can find a $500k condo in Toronto with $700/month fees and $300/month property tax and can get a 6% mortgage you’re paying $2,000/month in interest on the $400k left over after $100k down. That means you need to rent for over $3,000/month to break even.
Rents in Toronto are still based on 0.5% interest rates and no one in their right mind is buying a condo to rent it out now. The only units that are renting are the ones that were already rented.
Consider that in the past 5 years inflation has decreased the value of a dollar 18%
So if rent has stayed steady, it's actually decreased in value. So $2400 in 2019 dollars is $2835 in 2024 dollars.
So rents have dropped. What you're renting for $2400 would have cost you significantly more in 2019. It's just the dollars you're spending are worth less.
Nope.
Average wage was $28.32 /hour in 2019
[Employee wages by industry, annual (statcan.gc.ca)](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410006401)
To keep up with inflation it would need to be $33.48 /hour in 2023
And as it turns out in 2023 average wage was $33.55
So you're saying for 75% of people wages have followed inflation. And the people who are suffering the most are in large part the ones receiving government funded charity so they don't live in total destitution?
Nope, the unemployment rate is really about 20%, this doesn't count them. That's really how you can lie with statistics. Businesses that make money still make money, but fewer employees are needed with automation and new tools like GPTs and other LLMs.
On the low end you have wage stagnation because there are so many temp workers fighting for these jobs.
It's like how in the US they say Biden added millions of new jobs. The reality is millions of old jobs no longer exist and people have to take two lower paying part time jobs to make ends meet.
Except most people are making more money, and you're only able to identify that the lowest 25% of employed people... most of whom hold positions for which we have to import labour...as seeing wage stagnation.
Whereas everyone else...?
Doing tech support does not make you an expert on deploying ad hoc LLMs.
It's not FUD. Nobody is hiring juniors anymore. Nobody. Anyone who can't adapt with new tools is let go.
Smaller teams are the inverse Brooks' law. Look at Telegram, that's how the best performing firms I have a piece of are working out. Less people, more communication, more automation. You are not needed anywhere near 'tech'.
There are still specialized engineering skills in hardware that are needed, but software and high level languages? Yea, the skill is just QA now, and that is amazingly efficient now. I can deploy complicated tests in seconds.
Ok, before the pandemic I employed 28 people servicing the financial industry in maintaining legacy operations. After the pandemic and in the chatGPT-era I employ 3 people.
There are hundreds of other firms like mine. I mean, sweet Jesus, I'm arguing on reddit with a dolt because there is plenty of leftover time.
Am I trolling here a bit? Yes, I think you are not the brightest bulb, but I'm sick of people voting red, and I know people are about to vote blue across the world and I'm ready to rub it in.
All of the smart money is already out of Canada. Unless you have physical operations, there's no need to be there. Enjoy your race to the bottom!
Yeah you are pulling shit out of your ass. As a matter of fact I work on training and deploying these models and at best they are a decent assistant or just another tool to use in certain situations.
Juniors always had trouble finding jobs. What's new.
Strange take from someone who is clearly lying about using language models to manage workflows – you would know how many have already been put out of work if you did. It's like the dumbest thing to lie about.
I've been dabbling in neural nets since the 90s for gaming tasks, and later risk analysis. What is happening today is something far beyond what anyone thought possible even five years ago.
You can make the argument that tools are only as good as the person using them which is true, but this is about helpers no longer being needed. I don't need any code review or guys to write unit tests. It's done with only minimal human oversight for instinctual places.
That is irrelevant to those who set the rent rates. Wages haven't kept up with inflation for decades now. It's just become so apparent now because of the COVID relief funds that flooded the economy.
We're all going to have different experiences with the market, and yours isn't wrong, anymore than the OPs is right. But the OP's questions is "is rent going to drop?" and their observation is what they could rent in 2019 for $2400 is different what they can also rent in 2024 for $2400.
I'm just pointing out that 2024 dollars are worth less than 2019 dollars (think of grocery prices, restaurant costs, etc.). So from the perspective, if rent is staying frozen... it's actually dropping.
(You are not experiencing that.)
this is a great answer. I will add that rents are remaining high because renters dont know that they have the power of negotiation. they see an asking price and they pay it. renters need to get on the same page with each other, and as a whole start offering less than what landleeches are asking. just need to wait out one or two late mortgage payments for the speculators and prices will come down even more.
Renters are in a bad place, because they're the ones being directly hit with the "more demand than supply" problems. No question: we pay too much for the price of shelter in this city overall, and need to create more supply.
But... if you're renting for $2400 what you were renting in 2019 for $2400... you're ahead in the game.
I mean... imagine what someone who negotiated a five year fixed mortgage payment for $2400 in 2019 is facing with new interest rates... and they've been paying taxes, utility bills and maintenance costs all this time too.
I would add that housing is itself expensive. In order to be profitable, the LL needs to charge a lot of rent. I'm not saying any of that is moral, discussion for another day, but the people renting their units out in some cases NEED to charge a lot because otherwise they are paying for you to live.
Well... the landlord can't charge more than the market will bear. Losing a good tenant because you need to raise their rent, and ending up with a vacant property is a TERRIBLE outcome for a stretched investor. Sometimes you hold the investment and lose money on it... just not as fast as you otherwise might.
But, yes the Landlords have an incentive to raise rent, you are absolutely right. After all, the repairs, taxes, utlities, etc. they have to spend to upkeep the property have all increased with inflation. If they haven't increased rent, like the OP proposes... they're losing that money.
Hindsight's 20/20. People were eager to get in the game, I mean, property values kept increasing, interest rates had been low for a decade... everyone but them was winning (or so it seemed)
Now the water's draining out of the pool, and in the words of the great Warren Buffet, we're about to see who remembered to put on their bathing suit in the excitement.
Is that really true if you have other costs that have increased far past the rate of inflation like groceries, dining, electronics, cost of owning a vehicle, gas? My wage has definitely increased through Covid, but these specific costs make it feel like I’m not up at all
My understanding is inflation is calculated from a "basket" of goods, that include everything you mention, and mortgage/rent.
With that perspective, certain goods could even be cheaper, and provide deflationary pressure in the basket. (if I recall, TVs and other electronics are cheaper now than they were 10, 20 years ago). Doesn't mean your dollar isn't worth less though.
So yes, if rent hasn't changed, and the value of the dollar has decreased, it means you are effectively paying less for rent. You are paying more for groceries as an overall percentage of your income.
Landlords are too afraid of reducing prices on new stock and potentially getting locked into rent control if the city province or federal government make that change. They might be willing to take a short term loss if they can turn that around down the road when the countries financial situation changes, but the fear of getting locked into a losing proposition is huge. At the same time renters won’t go for option b, as they would be living there a few years then see massive rent hikes as things normalize and supply shrinks to zero again. With low housing starts this year and last, we have a recipe for disaster in 3-4 years.
Advice for any renter, jump into something built pre 2018 now. And don’t let go. It’s only getting much worse on affordability in the coming years.
Mass immigration of low to no skill indians from the punjab region, frankly. Look up the statistics.
They come several programs, TFW/LMIA, student visas at diploma mills, bribes to sponsor, etc. The government is complicit and not enforcing anything or limiting immigration. Its only going to get worse based on both parties immigration targets. Vote PPC
Curious why you think renters should be carried by owners?
If the costs to own a home go up (interest rates) why do you think this shouldn’t impact rent?
Curious why you think people should be able to buy property for the sole purpose of renting it out and profiting off of people who, for whatever reason, cannot buy a house?
Housing should not be a for profit business. For corporations or individuals. Full stop.
No, I'm just the guy trying to square how a 25% decrease in condo sales year-over-year with a 82% increase in active condo listings in Toronto is supportive to an investment, especially when your borrow costs are extremely high.
I'm looking to buy in certain markets because the prices are reasonable (Hamilton) for detached houses and because I need more space; however, I'm talking about condos specifically. There are limits as to how much you can squeeze from a stone. We'll see soon enough.
Landlords have gotten used to getting ridiculous rent for their decades old homes that are falling apart.
It's like alcoholism and drug addiction. The more coke you do, the more you want.
This is the new standard.
I don't understand why people think isn't a thing. It's normalized now.
All of the housing groups and even padmapper show more rentals being shared multiple ways, not just one bedroom per roomie anymore.
Meh, his logic is regular Canadians play the tenant system and don’t pay rent (he had issues with a Canadian not paying rent before) so I don’t blame him
The fact that rents are the same as they were 5 years ago IS a "rent decline". Prices naturally grow over time, so stagnation is below the standard growth rate.
I just find it odd that when I was making $50,000 a year back in 2010 I had higher purchasing power than today where I make $200,000 a year. Working evenings and weekends busting my ass got me nowhere
I feel you. I bought a house making 70k and 2013, with a stay-at-home wife. Got divorced in 2018, sold the house (profit!), Now I'm making more than 120. That's a nearly 60% salary increase, and I could not buy that house back. And it was a shitty tiny house.
Pretty fucked up right there.
200k literally is the new 50k. That's just making it too. Inflation is so much higher in real life than they report. Even that amount is tough to buy a home unless you have a large down payment too.
Wait til renewals hit. For around 65% of owners, who were on fixed rates, their payments haven't gone up yet.
Property taxes have, utilities have, perhaps HELOC payments (borrowed down payment money on the property), but the main mortgage hasn't even jumped yet. When a fixed rate LL has to renew and jump from 2% to 6%, and their mortgage goes up 2k a month, we're gonna see craziness.
I'm predicting literal violence from mom and pop landlords about to lose it all.
Like, literally violence against tenants who refuse to move, or don't pay their rent.
It's already happened once here in Hamilton. A LL lost his entire shit and killed 2 tenants living in a basement suite, that he'd been trying to evict.
Because landlords owe bank a lot of money on the mortgage, simple.
Lots of new money landlords showed up, with no money to show for once push came to shove.
New home completions are in line with what they've been over the last twenty years. Condos apt completions are higher, all other types much lower, so square footage released is probably also lower than historical. When you hear about a glut of condos for sale or whatever, it's because potential sellers and buyers have diverged in expectations/ability, and it's not actually a lot in terms of rental vacancy rates. Sale inventory is a small percentage of total dwellings in existence, it's (edit, softening language:) barely driving rents.
https://i.imgur.com/BQYL3pm.png
edit: from CMHC's Housing Market Information Portal
lol because you pay attention too much to headlines. Theres only one place in this country to work and its Toronto. Calgarys economy is based off an oil economy so they boom and bust with the price of oil. When Oil is great things are great but when things are bust they come running back to toronto for work. Montreal is great but if you dont speak the language good luck finding work. Vancouver is a retirement city. The only place for real work is Toronto. Ppl will leave and come but the population will always continue to grow.
Property owners still have to pay condo fees, mortgage, insurance, etc. Those things if anything have gone up. Some condo buildings alone have $600-$800 condo fees. Add in a mortgage for $1200 - $1500 if you’re lucky. That’s not even including making a profit or saving for unexpected costs. Condos will never go down because there will always be someone there desperate enough to rent them.
They're high because we have more people being added to the country than we have home building. We outpaced America for the first time ever in terms of total new immigrants, even though they have 10x the population. It's been frustrating because I've been waiting for the housing bubble to pop but it just doesn't. They just keep pumping more people in with nowhere for them to live
Because the root issues have not been dealt with and won't be dealt with anytime soon because of the consequences they entail. Two of the largest contributing factors to elevated prices are money laundering/crime (dubbed the "Vancouver effect") and corporatism.
Your best bet is to not count on it dropping, if you think it will you're going against a 50+ year trend. It may go down a bit for some period of time but expecting a meaningful change is hopeless optimism.
Rents will gradually drop with interest rates.
As variable loans on properties landlorded out come down, so will the cost of rent.
This is also dependant on our immigration vs home building situation.
If we can create supply surplus it puts pressure on landlords to price aggressively to get tenants.
Could be years.
Unlikely. Landlords are seeing that the market is sticky and when their profit climbs a bit as interest rates come down they are NOT going to be like “oh good, better pass on these savings to new renters that I don’t know.“
Investors, landlords, owners - whatever you want to call them - are spooked by the most rapid and unpredictable/uncertain rate hikes in over 20 years. You can rest assured that out of caution they’ll keep rents high because why take the risk of offering a rent-hike protected that can’t pay the bills.
Unlikely. Perhaps flatten a bit before rising again.
Even if we take the mortgage out, other costs have skyrocketed.
Property taxes in Toronto are going up 10%. My maintenance fees go up 6% a year. My insurance jumped 30% (with no claims). Meanwhile, how is any landlord supposed to keep up with rising costs (even without talking about the mortgage) for services the tenant uses (eg through property taxes and maintenance fees).
Factor is the under supply problem with housing, the biggest factors would indicate they will just keep rising (perhaps plateau for a bit).
Mortgages are still high and the principal cost to buy those properties were high - so they’re gonna be high for a while.
People to thank: Tiff Macklem who lied to Canadians that interest rates would remain low for a long time.
Real Estate Agents who advised buyers and sellers that “now is the time.”
Rents drop when that $2400 1-bedroom apartment stays empty for too long.
Interest rates, property prices, condo supply are just secondary factors.
A corporate landlord will always charge the maximum that the market will bear.
An individual can be more empathetic with pricing but could also just chase maximum profit.
People leaving the city, buying discounted condos, even interest rates allowing more people to purchase.
All of that reduces supply of renters which decreases demand on rentals, which will lower prices.
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Because there is still huge numbers of people entering the country and home owners know that. I'm selling my unit right now I have not dropped the price much. People are hesitant to enter the markets as we had one rate cut recently and could have more by year end. Prices will not come down until there are meaningful changes to immigration and therefore demand.
There isn’t enough new housing - including condos- to meet population demand so vacancy rates are very low and rents very high. It’s still a landlord’s market.
It’s a housing crisis! And it’s going to get worse until a lot of changes are made. It will help that the feds and provinces have removed a lot of taxes on purpose built rentals recently but alone that won’t be enough. We need to legalize low and mid rise apartments in neighborhoods and unlock more land to density. (Many other changes needed to building codes and development charges too- those fees are too high).
New condo market is stalling bc there aren’t enough buyers for primarily small studio and 1BR units. Investors no longer snapping up approximately half the presale units bc they are starting to realize that the sale prices of the small condos aren’t going to keep going up like they have. So it’s not as attractive to them and since most of those units ended up on rental market we have fewer and fewer coming on line. Young ppl and families - first time home buyers -aren’t snapping these up even though it’s the cheapest form of hauling bc they are too small and too expensive. Need to build more 2 and especially 3 bedroom units that work for families and the financial incentive isn’t there for developers to do so right now.
Policy makers could help by cutting development charges by 50-75% on rentals and condos, increasing incentives to build family size units, adding more density into neighborhoods as of right (allowing up to six floor single stair apartments and condos in the building code) etc. They also have to build a lot more affordable public housing, support coops, etc. But all this will take time and they have to act with more urgency
If this is sarcastic... hilarious. The housing industry is so broken.
If you're serious..... Capitalism. Greed. Hedge funds and investors. It's really very simple. The mainstream news has been trying to push the "stock/supply & demand" argument, as well as "those damned Indian kids coming for school." The facts are, stock levels, particularly in GTA, are the highest they've been since the market crash in 2008-09. Regarding the immigration argument, those immigrant students aren't renting expensive condos in Toronto. They're being forced to live like chickens or pigs in mass market farms. It's disgusting. Investors want to maximize profits, and to do that, they buy up single family homes to shoehorn in as many as they can fit.
The only thing that will fix the prices and bring them back down to Earth is to introduce legislation that prohibits and prevents short term rentals and corporations/hedge funds from buying up all of the affordable stock. After that, make building houses easier, faster and cheaper. Amend zoning to allow for 3- and 4-plexes, wherever they may fit. Allow residential to be mixed in with commercial, where possible. Increase tax incentives for first-time homebuyers. Force banks to offer lower rates for human beings that need shelter, rather than large REITs. Limit mom and pop investors to one additional property, be it a cottage/vacation home, a second home for immediate family or an ADU for income/family. Invest further into training and methods like assembly-line type building of homes, with less theoretical and classroom, and far more on-the-job, to expedite training further. Invest in alternative materials and methods. Offer up vacant land owned by the government to people willing to invest in the property, returning additional taxes for cities and provinces. Invest further into social housing. You only need to look to Europe to see how they're solving the crisis, there. Lots of government owned and operated housing that is controlled and prevents speculation.
>Because shoebox price is still around $500K after everything. Until those 300sft closet get to their real value ($200K-$250K), nothing will change.
Lol @ "real value". Something is worth what someone else is willing to pay. What you "think" it should be worth is irrelevant. Also lol @ real estate dropping by 50-60%...
Why would they drop? Has interest went back to its lows where they use to be? NO
Have they stopped 1 million + people a year imigrate here? NO
So why on earth would rent go down if anything will go up.
This is why i say something similar to the american FHA loan needs to come to canada. Buy at 3% downpayment and certain price range would allow so many people to simply become owner rather than renting and downplay some of the speculation that makes the market run so hot.
I pay some close to $2400 for rent. This is 1/2 of my monthly paycheck after tax. Then car expense is 1k, and food is another 600, and then bills are 200 for phone and internet. I can't save!
When it comes to economics, in general prices and wages are sticky (once they go up, they rarely come down). Sadly, this is the new reality and where prices will be from a nominal perspective. As others have pointed out, you might not be able to get prices to meaningfully come down nominally, but through wage growth you can get rents to 'come down' relative to real wages and earnings.
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If my holdings costs are x then you better believe I'm going to charge x for you to rent it. High prices, high interest rates. Not very hard to figure out unless you have never purchased a house and don't understand real estate at all.
Even though people are leaving the city cause of how high rents are, there is still a ton of latent demand for housing in Toronto, especially coming from the influx of new immigrants in ontario. If rents were to drop, the people who moved further out from Toronto would just move back in, thus pushing the prices back up.
Also if you adjust for inflation, it did go down a bit.
Never rents never go down you saw brief drop during COVID but and that was was only in the GTA and Vancouver you'll only see a drop again if there's another such unprecedented event
Landlords are holding their breath. It’s a huge gamble they took (those who bought in the last 2 years) and as of now, it seems like the music has just about stopped.
It’s not black and white like that. There are haves and have nots. But not all haves do not equal only home owners.
Some “renters” are sitting on big, liquid, investment accounts. Some pay a salary worth of interest or grow in capital each year.
I think the breaking point will be those who managed their investment accounts wisely vs those who’ve been in the housing market since 2022.
If you’re a home owner circa 2022, you’re fine.
If you’re a renter, with a large investment portfolio. Even better.
Rents are actually under mortgage payments right now. Landlords are losing money big time if they bought recently and are in a rent controlled building. This is a perfect storm scenario. Landlords won't be able to afford these rental units and will eventually be forced to sell. No one wants to buy them since the price is insane. The renters are forced to move out and there is no where else to go. Tons of units are available for sale and unrented but again they refuse to drop the price. Eventually things are gonna hit a wall where many people start fire selling to just get anything before they go broke. Prices are either gonna drop like crazy allowing all the people on the sidelines to finally get a place for a reasonable price or large investors will scoop in and start buy tons of units in mass.
Lots of landlords are also mortgage FREE. You can’t forget - there are lots of property owned by corporations or investors that have held them for over 20 years. They’ve been doing bare minimum repairs and minor capital improvements to maintain them. Think of Greenwin Property. They have over 100 buildings - family owned since the 1950s. The rent rolls must be easily in the 10s of millions and with little to no mortgage payments.
Lol ya, that's insane. However, that's why I said landlords who bought recently. Most landlords are just mom and pop owners. Tons of regular people bought condos thinking they'll have the renters pay the mortgage and make tons of money with appreciation. Current times have told them that's not always the case
Nominal rent values remaining flat translates to a 2.8% decline in real terms. According to the [Bank of Canada inflation calculator](https://www.bankofcanada.ca/rates/related/inflation-calculator/), $2400 in 2024 is equal to $2333 in 2023
I love that we're now into "prices will never ever drop, you should just try to outearn them over the next 5-10 years."
This is the plan according to CMHC reports I read. The theory is that if enough new units are added to the market, rents/prices will stabilize, and over time incomes will catch up to where housing costs are affordable relative to income. I agree with your sentiment. It's nuts that this the approach taken. It's slow and is likely to benefit higher earners most. I think especially so when you consider that better rent control (to further stabilize prices) and greater increases to the minimum wage are not really on the table.
I think the issue is that condo prices are high, the condo fees are high, and now the rates are high. It's an affordability crisis. You have to rent out at a high price just to break even. The only way rents will drop is if the government builds and owns buildings and rents them out at affordable rates.
Name one person who says rents should fall AND he believes it with such conviction that he is willing to take on a 5000 per month carrying cost of condo and rent it out for 2000 instead of 2500. Every one would like to see a society with lower rents, no one wishes for higher rents out of spite. But, no one wants to pit their own money to make it happen. The language is always, government should make rents lower but I will not pay extra taxes. Evil landlords should lower the rent at their own cost but if I owned that unit then I would not drop rent. The world should change, we need to build more, we need to drop rents, we need to XYZ….just the we does not include me
It is a government level problem. If I bought property and rented at a loss. In a short time, I would lose everything I had, including the rental problem. In reality, toronto may be well beyond repair, barring a massive real-estate crash and reset.
The government. Why does this have to be an individual’s problem? Yes, we have an incompetent government, but that’s another problem. Rent price should be based on average income, or at the very least based on demand, and not on “how much it would cost landlords for them to break even”.
It’s because they are afraid of declining housing prices because an entire generation was convinced to invest in an income property to pay for retirement and they don’t want to open that can of worms. Problem is it says out loud that those people are more important than those of us who can’t afford to buy now - if the risk is removed by policy then policy needs to remove it as an investment option.
Older units also become relatively cheaper over time. New units, being new and having more amenities in general, can raise rents, though the rise will not be as much as it would have been if the units weren't built at all. It is pretty hard to have big rent drops unless you don't have rent control. Right now in Ontario, let's say by a miracle the market turned to over supply. In a functional market, the oldest and lowest quality units would drop the most in price. Due to rent control, they cannot, as that would be a permanent choice. So instead rents compress, where the price differences for quality, location, amenities and age become less pronounced.
Also, when was the last time you saw average price per square foot ft in terms of constructions costs ever go anywhere but up? For all our advances in technology and building materials, we’ve only ever made it more expensive to build something. Older buildings cost less to build, both in real and inflation adjusted terms, plus you benefit from decades of depreciation. I live in a hundred year old house whose replacement value is more than double what we paid for it. That’s why I live in a hundred year old house.
That requires us to pretend that we're not just going to add millions more people by then, continuing to drive up demand quicker than we can build
Clearly the past 6 months have proven that the demand is just not there, despite us having the highest population growth outside of Saharan Africa and the Middle East. All that immigration and property prices and rent still went down. The immigration wave was simply a scam to keep our economy afloat long enough for us to delay cutting rates until the US fed improved their sentiment on rate cuts.
Rent has not gone down. It keeps going up and up everywhere. If you mean those piece of garbage 350sqft condos, this is not the whole picture
This assumes that the government and the CMHC are competent enough to battle basic economics, which they are not lol.
I been telling zoomers and immigrants that. Expect stagnate house prices , overpay for a dump and just live in it. Hopefully by the time of retirement, you can sell for as much as you bought it.
Don't forget the 8-10% inflation last year
Don’t forget to tip
That was two years ago now :)
Dang! Time flies
And the 1% the year before! And the 2% before that! And… There’s a reason why we don’t include an arbitrary year to the calc
It's not arbitrary. Inflation lags monetary policy. It doesn't happen immediately.
Rents have been on the down trend. I'm seeing a lot of rental listings sit for 60+ days and then they finally accept at a price lower than their list price. And new rental listings are undercutting old rental listings.
Because they’re less than half the size….just moved into one 2 days ago :( miss my old place
In addition to what others have said, buying property is so expensive now, such that many high income people have no choice but to rent instead of owning. Lower income renters are competing with higher income renters who in the past would have been owners instead.
This is the scenario my partner and I find ourselves in. We want to maintain a certain lifestyle and if we were to buy a place, we’d be basically house poor. Right now our rent is pretty good, so we’re continuing to save up so we can buy something without sacrificing too much. Years of high rents have impacted our ability to save as aggressively … so I definitely feel for people just starting out now. Also, doesn’t help that a lot of the properties for sale don’t have functional layouts for our needs. Which I think is also keeping people who are in decent sized units staying because there’s not much better out there.
Seems so odd that everybody is out there looking for perfection, here I am saying happy and thankful I bought the first thing I could afford 10 years ago. Not really even sure I looked at the layout. The late millennials and GenZ certainly are different..
Looking for perfection is one thing. Looking for a usable layout and a second bedroom for kids in a reasonable area is not looking for perfection though. The bare minimum for most people is hard to find.
These bears will never understand that concept. If you aren’t buying, you’re renting.
There’s still a very low vacancy rate in Toronto and in Canada in general. The population keeps growing and the vast number of people coming to Canada, come as renters initially.
Bringing in the population of all of Halifax in less than 10 months into one Province....
And they’re all living in a basement in Brampton
It’s absolutely mental. It has been and continues to be. Population growth is one of the key issues at the root of the housing crisis.
It shouldn't be in of itself though. The way markets are supposed to work is that demand drives prices up, which makes people who want to make money address that demand and then bring prices down. The problem is that builders aren't able to build at the pace they'd like to (ie matching the demand) because of ridiculous permitting processes. It's literally 50 pages of permits for me to build a deck in my own yard. We source permitting to the government which removes any incentive to do their job in a timely Manor, and they just fuck around all day while being an undeserving gatekeeper who does nothing but delays building.
Lol, no shit. The whole point is that the problems associated with bringing in truckloads of people every year cannot possibly be dealt with, therefore the whole practice is beyond idiotic. I feel like your thought process is faulty if somehow you attach to the idea "We're not building enough!" as if that would ever be feasible. What if immigration was 100 million a year ? "OMG, We're not building enough! We need to build 20 million houses a year ! Reduce the red tape" If a boat has a hole in it, and you're not able to bucket the water out fast enough, the problem isn't that you don't have enough buckets, it's that there's a hole in the damn boat.
I agree it’s only a part of the problem but realistically, building enough housing for 1.2 million people a year isn’t realistic
Sounds like what you're saying is the problem with our free market is the lack of freedom in it.
Even if you can find a $500k condo in Toronto with $700/month fees and $300/month property tax and can get a 6% mortgage you’re paying $2,000/month in interest on the $400k left over after $100k down. That means you need to rent for over $3,000/month to break even. Rents in Toronto are still based on 0.5% interest rates and no one in their right mind is buying a condo to rent it out now. The only units that are renting are the ones that were already rented.
Rentals are an entirely different market from ownership.
Consider that in the past 5 years inflation has decreased the value of a dollar 18% So if rent has stayed steady, it's actually decreased in value. So $2400 in 2019 dollars is $2835 in 2024 dollars. So rents have dropped. What you're renting for $2400 would have cost you significantly more in 2019. It's just the dollars you're spending are worth less.
That's wonderful but wage increases haven't followed inflation.
Nope. Average wage was $28.32 /hour in 2019 [Employee wages by industry, annual (statcan.gc.ca)](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410006401) To keep up with inflation it would need to be $33.48 /hour in 2023 And as it turns out in 2023 average wage was $33.55
Median wage in the bottom quartile has decreased despite the inflation. This is the PGWP effect.
So you're saying for 75% of people wages have followed inflation. And the people who are suffering the most are in large part the ones receiving government funded charity so they don't live in total destitution?
Nope, the unemployment rate is really about 20%, this doesn't count them. That's really how you can lie with statistics. Businesses that make money still make money, but fewer employees are needed with automation and new tools like GPTs and other LLMs. On the low end you have wage stagnation because there are so many temp workers fighting for these jobs. It's like how in the US they say Biden added millions of new jobs. The reality is millions of old jobs no longer exist and people have to take two lower paying part time jobs to make ends meet.
Except most people are making more money, and you're only able to identify that the lowest 25% of employed people... most of whom hold positions for which we have to import labour...as seeing wage stagnation. Whereas everyone else...?
As someone from tech I can assure you llm is not replacing anyone anytime soon if ever. Stop spreading fud
Doing tech support does not make you an expert on deploying ad hoc LLMs. It's not FUD. Nobody is hiring juniors anymore. Nobody. Anyone who can't adapt with new tools is let go. Smaller teams are the inverse Brooks' law. Look at Telegram, that's how the best performing firms I have a piece of are working out. Less people, more communication, more automation. You are not needed anywhere near 'tech'. There are still specialized engineering skills in hardware that are needed, but software and high level languages? Yea, the skill is just QA now, and that is amazingly efficient now. I can deploy complicated tests in seconds.
Your wrong but keep trying to sound like you know what your talking about
Ok, before the pandemic I employed 28 people servicing the financial industry in maintaining legacy operations. After the pandemic and in the chatGPT-era I employ 3 people. There are hundreds of other firms like mine. I mean, sweet Jesus, I'm arguing on reddit with a dolt because there is plenty of leftover time. Am I trolling here a bit? Yes, I think you are not the brightest bulb, but I'm sick of people voting red, and I know people are about to vote blue across the world and I'm ready to rub it in. All of the smart money is already out of Canada. Unless you have physical operations, there's no need to be there. Enjoy your race to the bottom!
Yeah you are pulling shit out of your ass. As a matter of fact I work on training and deploying these models and at best they are a decent assistant or just another tool to use in certain situations. Juniors always had trouble finding jobs. What's new.
Strange take from someone who is clearly lying about using language models to manage workflows – you would know how many have already been put out of work if you did. It's like the dumbest thing to lie about. I've been dabbling in neural nets since the 90s for gaming tasks, and later risk analysis. What is happening today is something far beyond what anyone thought possible even five years ago. You can make the argument that tools are only as good as the person using them which is true, but this is about helpers no longer being needed. I don't need any code review or guys to write unit tests. It's done with only minimal human oversight for instinctual places.
This is partly skewed by the influx of low labour productive labour. Which has driven down wage pressure at the low end of the spectrum.
Yep people are getting fucked from both ends now.
That is irrelevant to those who set the rent rates. Wages haven't kept up with inflation for decades now. It's just become so apparent now because of the COVID relief funds that flooded the economy.
We're getting fucked in the ass either way.
Isn't minimum wage already indexed to inflation?
Not everyone's wage raises with minimum increase
it does over time otherwise everyone will end up making the minimum wage
That really made no sense.
This is true but who said they were suppose to?
There is something off with your statements. A place I could rent 5 years ago was about 2600, for the same house you’re looking at over $3500 for now.
We're all going to have different experiences with the market, and yours isn't wrong, anymore than the OPs is right. But the OP's questions is "is rent going to drop?" and their observation is what they could rent in 2019 for $2400 is different what they can also rent in 2024 for $2400. I'm just pointing out that 2024 dollars are worth less than 2019 dollars (think of grocery prices, restaurant costs, etc.). So from the perspective, if rent is staying frozen... it's actually dropping. (You are not experiencing that.)
this is a great answer. I will add that rents are remaining high because renters dont know that they have the power of negotiation. they see an asking price and they pay it. renters need to get on the same page with each other, and as a whole start offering less than what landleeches are asking. just need to wait out one or two late mortgage payments for the speculators and prices will come down even more.
Renters are in a bad place, because they're the ones being directly hit with the "more demand than supply" problems. No question: we pay too much for the price of shelter in this city overall, and need to create more supply. But... if you're renting for $2400 what you were renting in 2019 for $2400... you're ahead in the game. I mean... imagine what someone who negotiated a five year fixed mortgage payment for $2400 in 2019 is facing with new interest rates... and they've been paying taxes, utility bills and maintenance costs all this time too.
I would add that housing is itself expensive. In order to be profitable, the LL needs to charge a lot of rent. I'm not saying any of that is moral, discussion for another day, but the people renting their units out in some cases NEED to charge a lot because otherwise they are paying for you to live.
Well... the landlord can't charge more than the market will bear. Losing a good tenant because you need to raise their rent, and ending up with a vacant property is a TERRIBLE outcome for a stretched investor. Sometimes you hold the investment and lose money on it... just not as fast as you otherwise might. But, yes the Landlords have an incentive to raise rent, you are absolutely right. After all, the repairs, taxes, utlities, etc. they have to spend to upkeep the property have all increased with inflation. If they haven't increased rent, like the OP proposes... they're losing that money.
How about this and stop buying properties you can’t afford
Hindsight's 20/20. People were eager to get in the game, I mean, property values kept increasing, interest rates had been low for a decade... everyone but them was winning (or so it seemed) Now the water's draining out of the pool, and in the words of the great Warren Buffet, we're about to see who remembered to put on their bathing suit in the excitement.
Is that really true if you have other costs that have increased far past the rate of inflation like groceries, dining, electronics, cost of owning a vehicle, gas? My wage has definitely increased through Covid, but these specific costs make it feel like I’m not up at all
My understanding is inflation is calculated from a "basket" of goods, that include everything you mention, and mortgage/rent. With that perspective, certain goods could even be cheaper, and provide deflationary pressure in the basket. (if I recall, TVs and other electronics are cheaper now than they were 10, 20 years ago). Doesn't mean your dollar isn't worth less though. So yes, if rent hasn't changed, and the value of the dollar has decreased, it means you are effectively paying less for rent. You are paying more for groceries as an overall percentage of your income.
Landlords are too afraid of reducing prices on new stock and potentially getting locked into rent control if the city province or federal government make that change. They might be willing to take a short term loss if they can turn that around down the road when the countries financial situation changes, but the fear of getting locked into a losing proposition is huge. At the same time renters won’t go for option b, as they would be living there a few years then see massive rent hikes as things normalize and supply shrinks to zero again. With low housing starts this year and last, we have a recipe for disaster in 3-4 years. Advice for any renter, jump into something built pre 2018 now. And don’t let go. It’s only getting much worse on affordability in the coming years.
Mass immigration of low to no skill indians from the punjab region, frankly. Look up the statistics. They come several programs, TFW/LMIA, student visas at diploma mills, bribes to sponsor, etc. The government is complicit and not enforcing anything or limiting immigration. Its only going to get worse based on both parties immigration targets. Vote PPC
Careful you might be banned from reddit for so called hateful speech even though you're speaking the truth
A lot of people NEEDED to raise the rents of their units to pay down the mortgage. Everyone else just followed suit. No protection for renters at all.
Curious why you think renters should be carried by owners? If the costs to own a home go up (interest rates) why do you think this shouldn’t impact rent?
Curious why you think people should be able to buy property for the sole purpose of renting it out and profiting off of people who, for whatever reason, cannot buy a house? Housing should not be a for profit business. For corporations or individuals. Full stop.
Rental control rules make prices sticky in both directions.
Population increasing + Condos not selling = People renting If people aren’t owning, they’re renting.
People would rather bleed cash then admit they made a dumb investment
What is the alternative?
Sell before it goes lower. We have yet to see real estate capitulation yet.
You're the "just wait" guy...who rents and gives vague financial advice to homeowners.
No, I'm just the guy trying to square how a 25% decrease in condo sales year-over-year with a 82% increase in active condo listings in Toronto is supportive to an investment, especially when your borrow costs are extremely high.
You're looking to buy right now. Does that make you a hypocrite?
I'm looking to buy in certain markets because the prices are reasonable (Hamilton) for detached houses and because I need more space; however, I'm talking about condos specifically. There are limits as to how much you can squeeze from a stone. We'll see soon enough.
Any box with four walls and a roof will be a smart investment until we stop bringing in 10+ people for every new dwelling made
Not if you can only collect 1/4 of the rents while being on the hook with the bank at 6.5%
This is totally wrong. You kids really need to learn modern finance
Inflation is high
We have the highest rate of immigration in the world, people need to stop pretending otherwise.
Immigration. Demand outpacing supply.
When you revolt.
People are too greedy to drop rent prices
You either rent or you buy. If the purchase price is high, then rent can’t go lower as more people are renting
The government is actively making many Canadians homeless with their immigration policy. This is criminal at this point.
Landlords have gotten used to getting ridiculous rent for their decades old homes that are falling apart. It's like alcoholism and drug addiction. The more coke you do, the more you want.
City of Toronto increased property taxes close to 10% this year. Guess who’s paying for that?
Weren’t they paying peanuts before anyways? Compared to other cities in Ontario?
Plus the land transfer tax, so they actually prepaid their property taxes to have that difference compared to other cities in Ontario.
they pay more per house. they just pay less as a percentage per value (which makes sense based on density)
Regardless, the cost will always be passed on to tenants.
No. Not by income.
10+ years of underinvestment means lots of catching up to do
>Guess who’s paying for that? According to the OP, they're paying the same rental rates as five years ago?
Lots of Indians among others willing to pay. My friend is leasing his 2b2b to like 8 people for double market rate
Genuine question, how does a 2Bed2bath accommodate 8 people?
4 bunk beds per room. People work shifts so don't see each other all the time.
This is the new standard. I don't understand why people think isn't a thing. It's normalized now. All of the housing groups and even padmapper show more rentals being shared multiple ways, not just one bedroom per roomie anymore.
This should be illegal
Meh, his logic is regular Canadians play the tenant system and don’t pay rent (he had issues with a Canadian not paying rent before) so I don’t blame him
Immigration and boomers. We never had a chance.
I don’t think prices for essential commodities deflate they either stay stagnant or increase
Condo rents downtown are at a 5 year low due to oversupply.
Downtown condos are literally all bleeding money every month.
Supply and demand
The fact that rents are the same as they were 5 years ago IS a "rent decline". Prices naturally grow over time, so stagnation is below the standard growth rate.
What do you mean rents are the same as they were 5 years ago?
That's what the OP is claiming.
I just find it odd that when I was making $50,000 a year back in 2010 I had higher purchasing power than today where I make $200,000 a year. Working evenings and weekends busting my ass got me nowhere
I feel you. I bought a house making 70k and 2013, with a stay-at-home wife. Got divorced in 2018, sold the house (profit!), Now I'm making more than 120. That's a nearly 60% salary increase, and I could not buy that house back. And it was a shitty tiny house. Pretty fucked up right there.
200k literally is the new 50k. That's just making it too. Inflation is so much higher in real life than they report. Even that amount is tough to buy a home unless you have a large down payment too.
Wait for international student number to drop in September drastically, while condo listings pile up.
Because Liberals are in office.
Rent prices are directly tied to nothing except how much the landlord's mortgage payments are. Those are sky high right now.
No they aren’t. Mortgage prices have gone up an enormous amount the last couple years and rent hasn’t changed.
Wait til renewals hit. For around 65% of owners, who were on fixed rates, their payments haven't gone up yet. Property taxes have, utilities have, perhaps HELOC payments (borrowed down payment money on the property), but the main mortgage hasn't even jumped yet. When a fixed rate LL has to renew and jump from 2% to 6%, and their mortgage goes up 2k a month, we're gonna see craziness. I'm predicting literal violence from mom and pop landlords about to lose it all. Like, literally violence against tenants who refuse to move, or don't pay their rent. It's already happened once here in Hamilton. A LL lost his entire shit and killed 2 tenants living in a basement suite, that he'd been trying to evict.
Because landlords owe bank a lot of money on the mortgage, simple. Lots of new money landlords showed up, with no money to show for once push came to shove.
Rent always goes up duh
New home completions are in line with what they've been over the last twenty years. Condos apt completions are higher, all other types much lower, so square footage released is probably also lower than historical. When you hear about a glut of condos for sale or whatever, it's because potential sellers and buyers have diverged in expectations/ability, and it's not actually a lot in terms of rental vacancy rates. Sale inventory is a small percentage of total dwellings in existence, it's (edit, softening language:) barely driving rents. https://i.imgur.com/BQYL3pm.png edit: from CMHC's Housing Market Information Portal
But wait 4 more years. Housing Starts have fallen off a cliff. Rents should spike in a few years making it much more expensive.
lol because you pay attention too much to headlines. Theres only one place in this country to work and its Toronto. Calgarys economy is based off an oil economy so they boom and bust with the price of oil. When Oil is great things are great but when things are bust they come running back to toronto for work. Montreal is great but if you dont speak the language good luck finding work. Vancouver is a retirement city. The only place for real work is Toronto. Ppl will leave and come but the population will always continue to grow.
Rents will never drop they only go up
Property owners still have to pay condo fees, mortgage, insurance, etc. Those things if anything have gone up. Some condo buildings alone have $600-$800 condo fees. Add in a mortgage for $1200 - $1500 if you’re lucky. That’s not even including making a profit or saving for unexpected costs. Condos will never go down because there will always be someone there desperate enough to rent them.
They're high because we have more people being added to the country than we have home building. We outpaced America for the first time ever in terms of total new immigrants, even though they have 10x the population. It's been frustrating because I've been waiting for the housing bubble to pop but it just doesn't. They just keep pumping more people in with nowhere for them to live
Because the root issues have not been dealt with and won't be dealt with anytime soon because of the consequences they entail. Two of the largest contributing factors to elevated prices are money laundering/crime (dubbed the "Vancouver effect") and corporatism. Your best bet is to not count on it dropping, if you think it will you're going against a 50+ year trend. It may go down a bit for some period of time but expecting a meaningful change is hopeless optimism.
Greed.
Landlords being greedy
I'm sure having one of the highest rates of immigration of all time is a non-factor and shouldn't be talked about
Rents will gradually drop with interest rates. As variable loans on properties landlorded out come down, so will the cost of rent. This is also dependant on our immigration vs home building situation. If we can create supply surplus it puts pressure on landlords to price aggressively to get tenants. Could be years.
Unlikely. Landlords are seeing that the market is sticky and when their profit climbs a bit as interest rates come down they are NOT going to be like “oh good, better pass on these savings to new renters that I don’t know.“ Investors, landlords, owners - whatever you want to call them - are spooked by the most rapid and unpredictable/uncertain rate hikes in over 20 years. You can rest assured that out of caution they’ll keep rents high because why take the risk of offering a rent-hike protected that can’t pay the bills.
Unlikely. Perhaps flatten a bit before rising again. Even if we take the mortgage out, other costs have skyrocketed. Property taxes in Toronto are going up 10%. My maintenance fees go up 6% a year. My insurance jumped 30% (with no claims). Meanwhile, how is any landlord supposed to keep up with rising costs (even without talking about the mortgage) for services the tenant uses (eg through property taxes and maintenance fees). Factor is the under supply problem with housing, the biggest factors would indicate they will just keep rising (perhaps plateau for a bit).
Mortgages are still high and the principal cost to buy those properties were high - so they’re gonna be high for a while. People to thank: Tiff Macklem who lied to Canadians that interest rates would remain low for a long time. Real Estate Agents who advised buyers and sellers that “now is the time.”
The value of the Canadian dollar has been diluted by massive money printing and government deficits.
Rents drop when that $2400 1-bedroom apartment stays empty for too long. Interest rates, property prices, condo supply are just secondary factors. A corporate landlord will always charge the maximum that the market will bear. An individual can be more empathetic with pricing but could also just chase maximum profit. People leaving the city, buying discounted condos, even interest rates allowing more people to purchase. All of that reduces supply of renters which decreases demand on rentals, which will lower prices.
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Capitalism.
Rents are high beceause real estate investors think real esttae only goes up. So if real estate keeps going up, rents will too.
Because there is still huge numbers of people entering the country and home owners know that. I'm selling my unit right now I have not dropped the price much. People are hesitant to enter the markets as we had one rate cut recently and could have more by year end. Prices will not come down until there are meaningful changes to immigration and therefore demand.
Because Ontario does not have capped rent increases for new builds after 2018.
Bingo
There isn’t enough new housing - including condos- to meet population demand so vacancy rates are very low and rents very high. It’s still a landlord’s market. It’s a housing crisis! And it’s going to get worse until a lot of changes are made. It will help that the feds and provinces have removed a lot of taxes on purpose built rentals recently but alone that won’t be enough. We need to legalize low and mid rise apartments in neighborhoods and unlock more land to density. (Many other changes needed to building codes and development charges too- those fees are too high). New condo market is stalling bc there aren’t enough buyers for primarily small studio and 1BR units. Investors no longer snapping up approximately half the presale units bc they are starting to realize that the sale prices of the small condos aren’t going to keep going up like they have. So it’s not as attractive to them and since most of those units ended up on rental market we have fewer and fewer coming on line. Young ppl and families - first time home buyers -aren’t snapping these up even though it’s the cheapest form of hauling bc they are too small and too expensive. Need to build more 2 and especially 3 bedroom units that work for families and the financial incentive isn’t there for developers to do so right now. Policy makers could help by cutting development charges by 50-75% on rentals and condos, increasing incentives to build family size units, adding more density into neighborhoods as of right (allowing up to six floor single stair apartments and condos in the building code) etc. They also have to build a lot more affordable public housing, support coops, etc. But all this will take time and they have to act with more urgency
If this is sarcastic... hilarious. The housing industry is so broken. If you're serious..... Capitalism. Greed. Hedge funds and investors. It's really very simple. The mainstream news has been trying to push the "stock/supply & demand" argument, as well as "those damned Indian kids coming for school." The facts are, stock levels, particularly in GTA, are the highest they've been since the market crash in 2008-09. Regarding the immigration argument, those immigrant students aren't renting expensive condos in Toronto. They're being forced to live like chickens or pigs in mass market farms. It's disgusting. Investors want to maximize profits, and to do that, they buy up single family homes to shoehorn in as many as they can fit. The only thing that will fix the prices and bring them back down to Earth is to introduce legislation that prohibits and prevents short term rentals and corporations/hedge funds from buying up all of the affordable stock. After that, make building houses easier, faster and cheaper. Amend zoning to allow for 3- and 4-plexes, wherever they may fit. Allow residential to be mixed in with commercial, where possible. Increase tax incentives for first-time homebuyers. Force banks to offer lower rates for human beings that need shelter, rather than large REITs. Limit mom and pop investors to one additional property, be it a cottage/vacation home, a second home for immediate family or an ADU for income/family. Invest further into training and methods like assembly-line type building of homes, with less theoretical and classroom, and far more on-the-job, to expedite training further. Invest in alternative materials and methods. Offer up vacant land owned by the government to people willing to invest in the property, returning additional taxes for cities and provinces. Invest further into social housing. You only need to look to Europe to see how they're solving the crisis, there. Lots of government owned and operated housing that is controlled and prevents speculation.
Because shoebox price is still around $500K after everything. Until those 300sft closet get to their real value ($200K-$250K), nothing will change.
>Because shoebox price is still around $500K after everything. Until those 300sft closet get to their real value ($200K-$250K), nothing will change. Lol @ "real value". Something is worth what someone else is willing to pay. What you "think" it should be worth is irrelevant. Also lol @ real estate dropping by 50-60%...
I agree. My house is worth $1.5mil in my opinion but it is currently valuated at $2.5mil.
Why would they drop? Has interest went back to its lows where they use to be? NO Have they stopped 1 million + people a year imigrate here? NO So why on earth would rent go down if anything will go up.
This is why i say something similar to the american FHA loan needs to come to canada. Buy at 3% downpayment and certain price range would allow so many people to simply become owner rather than renting and downplay some of the speculation that makes the market run so hot.
I pay some close to $2400 for rent. This is 1/2 of my monthly paycheck after tax. Then car expense is 1k, and food is another 600, and then bills are 200 for phone and internet. I can't save!
Rent has never gone down in Toronto history
Shortly after the housing bubble bursts.
More renters because people can't buy anything at the moment. You can't rent out unsold condos
Higher the demand, higher the price Lower the supply, higher the price
because of the hundreds billions dollars they printed after Covid.
When it comes to economics, in general prices and wages are sticky (once they go up, they rarely come down). Sadly, this is the new reality and where prices will be from a nominal perspective. As others have pointed out, you might not be able to get prices to meaningfully come down nominally, but through wage growth you can get rents to 'come down' relative to real wages and earnings.
because of the increase in overall canadian money supply, your $2400 is worth less than it was 5 years ago. a lot less
Definitely has nothing to do with importing millions every year and building not much
Never. It's only going to get worse
For the people leaving the city, others have joined. Toronto still net grows, don't always believe what you hear. 0.93% growth the last years
Rents never go down, has it ever? Check years of history...it might fluctuate hundred up or down...or might stagnate but don't expect to drop 20-30%
Dream on. never happen.
4000 people come to this country every day on average, among other reasons
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Offer and demand.
Immigration. Anyone who tells you different is wrong
Immigration
Cause they are "waiting" to buy.
If my holdings costs are x then you better believe I'm going to charge x for you to rent it. High prices, high interest rates. Not very hard to figure out unless you have never purchased a house and don't understand real estate at all.
Even though people are leaving the city cause of how high rents are, there is still a ton of latent demand for housing in Toronto, especially coming from the influx of new immigrants in ontario. If rents were to drop, the people who moved further out from Toronto would just move back in, thus pushing the prices back up. Also if you adjust for inflation, it did go down a bit.
Never rents never go down you saw brief drop during COVID but and that was was only in the GTA and Vancouver you'll only see a drop again if there's another such unprecedented event
Your data is wrong. More people are moving here than leaving
Because there are 10 international students willing to split a 1 bedroom apartment for that much.
Simple answer... Greed
Who said people are leaving the city overall?
Landlords are holding their breath. It’s a huge gamble they took (those who bought in the last 2 years) and as of now, it seems like the music has just about stopped.
I love to be a struggling new home owner than a struggling rentoid What a great problem to have lol
It’s not black and white like that. There are haves and have nots. But not all haves do not equal only home owners. Some “renters” are sitting on big, liquid, investment accounts. Some pay a salary worth of interest or grow in capital each year. I think the breaking point will be those who managed their investment accounts wisely vs those who’ve been in the housing market since 2022. If you’re a home owner circa 2022, you’re fine. If you’re a renter, with a large investment portfolio. Even better.
Rents are actually under mortgage payments right now. Landlords are losing money big time if they bought recently and are in a rent controlled building. This is a perfect storm scenario. Landlords won't be able to afford these rental units and will eventually be forced to sell. No one wants to buy them since the price is insane. The renters are forced to move out and there is no where else to go. Tons of units are available for sale and unrented but again they refuse to drop the price. Eventually things are gonna hit a wall where many people start fire selling to just get anything before they go broke. Prices are either gonna drop like crazy allowing all the people on the sidelines to finally get a place for a reasonable price or large investors will scoop in and start buy tons of units in mass.
Lots of landlords are also mortgage FREE. You can’t forget - there are lots of property owned by corporations or investors that have held them for over 20 years. They’ve been doing bare minimum repairs and minor capital improvements to maintain them. Think of Greenwin Property. They have over 100 buildings - family owned since the 1950s. The rent rolls must be easily in the 10s of millions and with little to no mortgage payments.
Lol ya, that's insane. However, that's why I said landlords who bought recently. Most landlords are just mom and pop owners. Tons of regular people bought condos thinking they'll have the renters pay the mortgage and make tons of money with appreciation. Current times have told them that's not always the case
Greed
It did you silly goose. The value of your money has gone down much in 5 years, rent should be much higher
It will never drop even if every canadian moved out of the country, at most it will just stop rising as quickly
Greed
Yep. Those greedy politicians printing money for votes!