APARTMENT RENTS DOWN 6%
The average rent for all Canadian properties listed on Rentals.ca in February was $1,714 per month, down 6 per cent from $1,823 in February of last year. For landlords, that could be a positive sign given it is the lowest annual decrease reported in the past nine months. From June 2020 through January 2021, rental rates have been down on average between 7 per cent and 9.5 per cent.
“The condominium apartment market continues to weigh down the overall rental market in Canada.”
More encouraging news is that after a year of pandemic restrictions leading to average rental rates in Canada hitting bottom, rates for single-family, townhouse, and rental apartment properties all increased in February. Vancouver remains the most expensive city for renters looking for one- and two-bedroom homes on the list of 35 cities ($1,891 and $2,568 respectively) while Toronto finished second ($1,808 and $2,388).
Vancouver and Toronto are also the top two priciest cities for condominium rentals and apartments, which didn’t fair so well compared to other housing types.
“The condominium apartment market continues to weigh down the overall rental market in Canada, with huge year-over-year declines in average rental rates in BC, Quebec and Ontario, especially for tiny studio apartments,” said Ben Myers, president of Bullpen Research & Consulting. “Investors have been in a race to the bottom for several months, whereas the more institutional owners of the mostly cheaper rental apartments have been more patient in reducing rent, often using this opportunity to renovate vacated suites.”
Meanwhile, purpose-built rental apartments in Quebec and British Columbia recorded annual increases in their average monthly rental rate across the board, with three-bedroom rental apartments in British Columbia showing an annual increase of 28 per cent.
On a provincial level, British Columbia had the highest average monthly rental rate for all property types in February at $1,954. Ontario had the second highest average rental rate at $1,919 per month. Newfoundland had the lowest average monthly rental rate at $988.
The average monthly rental rates in Ontario decreased 13 per cent year over year in February for all property types. Quebec rents were also down, and average rents in Alberta and Saskatchewan were slightly down. Average monthly rents in British Columbia, Manitoba, and Newfoundland were up year over year.
All 20 of the Canadian neighbourhoods with the biggest declines in average rent levels over the last year for all property types were in the Greater Toronto Area.
Pageviews on Rentals.ca are up 48 per cent in the first two months of 2021 over the final two months of 2020. Fear of COVID-19 might have prevented some would-be renters from thinking about a move. Now, many tenants are considering moving and taking advantage of the cheaper rental rates.
Condo apartments have experienced significant declines in 2021 with average monthly rent down 18.1 per cent in February. Units listed on Rentals.ca in the $1,600 price range so far this year are double the rate of the last two years. Among the reasons for this are average rents going down for more expensive units — especially pricey condo rentals — and the bottom of the market getting more expensive, as there are fewer $800-to-$1,000-per-month rentals.
Condo apartments and single-family homes in Canada’s priciest cities — Toronto and Vancouver — both experienced steep declines in the average monthly rental rates year over year. Exacerbating the rental market decline in Toronto recently has been the addition of 2,254 new rental apartments completed over the final four months of 2020.
SAVING WATER A NEW APPROACH
The Apartment Group
Having sold many buildings and having strong relationships with our clients, we often bring to their attention things that can assist their business, bottom line and increase building value. We have done this in the past with things like: hydro sub-metering; led lighting; and condo conversion to reduce taxes; etc. On the water side most owners understand that changing toilets and shower heads lead to immediate water savings but after that what? Water and specifically floods are a large concern today. Many who are renewing their building insurance or who are buying buildings have seen insurance rates more than doubling. This was a direct result in the industry of a few major floods in multi residential building in North America.
One or our energy management consultants, searches the world for the most effective and cost efficient systems for energy savings that would fit the apartment sector. One is the Flow Management Device (FMD). Quite simply this a device that is on the owners side of the water meter and what it does is that it sends a "back flow" to where the water is coming in and basically compresses the air (ie. bubbles that are in the water as the meter reads that as water and not air) so the meter gets the real volume. For example, if 5 gallons of water goes through the meter it will measure 6.5 gallons due to air bubbles. This a custom device for each building and the pay back is generally 2.5 years with a 20 year lifespan. We have done over 600 installations and the savings are 10-20% per annum.
Another technology is LEAK. This technology is a wireless one wherein a device is hooked up to the toilets and is broadcast to a back office system on line. It monitors in real time toilets which are leaking. It groups them in each building by severity and will then send out a work order or notify the on site staff to repair the toilet before tons of money goes down the drain. According to Toronto Water "a leaky toilet can waste up to 600 m3 per month" and at $4.25 per m3 that is $2,500.
There is also a similar technology for FLOOD detection. Similar to toilets, sensors are placed is strategic locations which will monitor the water flow in real time. This will pre-alert on site staff and or management that a potential issue exists and that it should be looked at immediately. This can save tons of money if a larger flood can be curtailed. They are also working on a system whereby shut off valves also can be installed so that the system once it senses something can shut down that line 100% avoiding a flood.
Finally, due to the real time sensors and monitoring noted above, they are very close to having the capability of sub-metering water without the need to re-pipe or add massive new piping to the system. Again like in hydro, there will be sensors attached to each suite intake and will monitor in real time the usage and pass that cost onto the tenant.
If you want to know more about these devices and savings contact firstname.lastname@example.org ....
CANADIAN GDP - WHAT'S HAPPENING
Real gross domestic product (GDP) rose 0.7% in January, following 0.1% growth in December. This ninth consecutive monthly increase continued to offset the steepest drops on record in Canadian economic activity observed in March and April 2020. However, total economic activity was about 3% below the February level before the COVID-19 pandemic.
Both goods-producing (+1.5%) and services-producing (+0.4%) industries were up in January as the 20 industrial sectors were nearly evenly split between expansions and contractions. Preliminary information indicates an approximate 0.5% increase in real GDP for February. Retail trade, construction, and real estate and rental and leasing all contributed to the growth, while manufacturing offset some of the increase. Owing to its preliminary nature, this estimate will be revised on April 30 with the release of the official GDP data for February.
The manufacturing sector expanded 1.9% in January, more than offsetting a 0.7% contraction in December, continuing the sequence of increases alternating with small declines seen since September 2020. Increases in sales and inventory buildup contributed to higher production in January as both durable and non-durable manufacturing grew.
Oil and gas extraction expanded 2.1% in January, up for a fifth consecutive month. Oil sands extraction grew 2.7% as facilities in Alberta continued to increase production. Oil and gas extraction (except oil sands) rose 1.3% as both oil extraction and natural gas extraction were up. Support activities for mining, and oil and gas extraction grew 5.1% in January, led by higher drilling and rigging services.
Construction was up 1.4% in January, the third increase in four months, as the majority of subsectors rose. Residential construction grew 3.1%, rising every month since May 2020, as all types of residential construction were up. Repair construction increased 1.4%, while non-residential construction edged up 0.1% as higher commercial and institutional construction offset lower industrial construction. Engineering and other construction activities edged down 0.2% in January.
The public sector (educational services, health care and social assistance, and public administration) grew 0.3% in January. Health care and social assistance rose 0.8%, led by ambulatory health care services (+1.2%). The educational services sector was up 0.4%, as elementary and secondary schools and universities contributed most to the increase. Public administration (-0.4%) declined for the first time in nine months, as a 1.5% decrease in local, municipal and regional public administration contributed the most to the contraction.
FOR SALE FROM THE APARTMENT GROUP
2622 Keele Street – Toronto – Unpriced
This property contain 11 suites and is a concrete walk up building on Keele just south of Highway #410. It is an investment that has been in the family for decades and contains a mixture of one and two bedroom suites. There is potential to add a suite in the basement level. Heating is HWG and tenants pay their own hydro. Currently there are five suites empty and being kept as such for a new buyer to renovate and realize the upside immediately. Rents are substantially below market.
564 Lyons Lane – Oakville – Asking $3,400,000 / 3.75% Cap Rate
This is a totally renovated 6 plex located on a private ravine setting in Midtown Oakville. It is walking distance to retail and office and the GO Train VIA Rail station. The property was totally gutted and renovated in the last two years to above condo quality with porcelain floors, gourmet kitchens and European style bathrooms. Rents are strong and there still is some lift in them. Owner occupies the main floor suite which is around 1,400 sf and can be made available for a buyer who wants to live on site. Potential for condo conversion as well.
477 Dean Avenue – Oshawa – Asking $19,900,000 / 3.5% Cap Rate
Located in east Oshawa in a quite residential enclave, this property comprise 50 townhouse units and one non registered loft unit. The site is huge and can accommodate another 16 unit townhouse block. Around 38 units and been totally renovated and all units have been sub-metered for all utilities with 38 tenants paying all. Many improvements have been made to the building recently. The site was once approved for condo conversion.
19 Pearl Street - Hamilton – Asking $3,600,000
This is a development site located in downtown Hamilton. It is an approved site for 10 townhouse and 2 apartments. This could be market housing or rental. Walking distance to all amenities. Buyer to complete Site Plan Approval. House prices rose over 20% in the last year in Hamilton. This is a very strong market and the housing is considered affordable entry level.
THE APARTMENT GROUP
Together the team has completed over 1,500 transactions and has sold over $6.5 billion in apartments and development land. Put us to work for you and see the results. NO ONE has sold more buildings then our group. Experience, knowledge and professionalism will insure you get the right deal or the highest price if you are selling.
The Apartment Group is a dedicated team of professionals specializing in the sale of multi-residential investment properties. With over 40 years of combined experience, the team brings together their strengths including strong negotiation and sales skills along with highly technical market analysis and appraisal methods.
We are a boutique Brokerage but have the capabilities of the larger houses without the overhead. We have: an internal database of over 10,500 active apartment and land Buyers; a list of all apartment building owners in the Greater Toronto Area; our web site gets over 50,000 hits a month; we highlight properties for sale through our newsletter which reaches 10,000 investors monthly.
President & Owner,
LORENZO DIGIANFELICE, AACI
Broker of Record, Owner