GTA RENTS UP AND UP AND UP
GTA rents continued to trend up in March 2022, with Bullpen Research & Consulting and TorontoRentals.com reporting an increase of 10 per cent versus a year ago. Since the height of COVID-19 in August 2021, average GTA rents have been steadily rising – as have interest rates, which will likely keep some prospective buyers in the rental market for longer. Moving forward, analysts predict that new housing completions will rise, adding more supply throughout the year as persistent inflation keeps driving up the costs for landlords. As a result, rents are expected to continue to increase, but not at the same pace experienced in Q3 and Q4 of 2021.
“After very strong growth in the second half of 2021, average rental rates in the GTA have flattened out, with this trend consistent across property types, bedroom types and geographic areas,” said Ben Myers, president of Bullpen Research & Consulting. “[We] still expect rents to increase in 2022, but at a slower pace than previously forecasted.”
"In general, the price growth of condominiums has outpaced apartments over the past year. In Mississauga, the average rent for condos ($2,627) in the first quarter of 2022 was 34 per cent higher than the average rent for apartments ($1,955)."
According to the report, a majority of the municipalities in the GTA had slight declines in average monthly rents for condo rentals and apartments. Toronto rents saw a month-over-month decline of 0.4 per cent; Mississauga had a monthly decline of 0.9 per cent; Etobicoke average monthly rents declined by 2.6 per cent; Scarborough experienced a monthly decline of 3.8 per cent and Brampton monthly rents were down 5.4 per cent.
The spring market should see increased tenant demand, and with condo premiums rising from 15 per cent to 35 per cent in the major municipalities, the high end of the rental market is strong again and that could pull up rents in the near future.
In general, the price growth of condominiums has outpaced apartments over the past year. In Mississauga, the average rent for condos ($2,627) in the first quarter of 2022 was 34 per cent higher than the average rent for apartments ($1,955).
In Scarborough, the margin of rents for condos over apartments in the first quarter was 27 per cent; in Etobicoke, the difference was 26 per cent, and in Toronto where the condo premium is lower, the average rent for condos still outpaced the average rent for apartments by 15 per cent.
While condos consistently rent for higher prices than apartments because they are newer and typcially offer more amenities, this premium declined during the pandemic as demand for expensive prime condo projects close to employment plummeted. But rents for condos have risen again as employees return to downtown offices and their places of employment.
Average rents for condominium rentals for studios, one-, two- and three-bedroom units have risen significantly in March from January 2021.
Average monthly rent for three-bedroom condo rentals was $3,534 in March, up 30 per cent from $2,716 in January 2021. Average rent for a two-bedroom condo in March was $2,819, up from $2,440 in January 2021; average rent for a one-bedroom in March was $2,161, up from $1,869 in January 2021 and average rent for a studio went from $1,552 in January 2021 to $1,719 in March.
For apartments, two-bedroom units saw the most notable increase, where the average rent in March was $2,306, up 10 per cent from $2,098 in January 2021.
The average rent for condo apartments was $2,480 per month in the first quarter of 2020, declining significantly over the next year by 17 per cent before increasing to $2,457 per month in the first quarter of this year. The average rent for single-family homes was $2,793 per month in the first quarter of 2020, before also experiencing a significant decline in the latter half of 2020 and the start of 2021 before rising 21 per cent to $2,980 per month in the first quarter of 2022.
Average rents per-square-foot for 14 new condominium projects in Scarborough so far this year have surpassed pre-pandemic levels at $3.15, which is 4.3 per cent higher than 2019, and up 10 per cent over 2021.
MOST CANADIANS GIVEN UP OWNERSHIP DREAMS
GLOBAL NEWS - Craig Lord
The dream of ever owning a home is looking bleak for a majority of Canadians shut out of the housing market, according to new polling from Ipsos. The new survey conducted exclusively for Global News shows six in 10 (63 per cent) non-home owners have “given up” on ever owning a home.
“As housing prices rise, inflation continues and interest rates go up… we can see that there’s a bunch of Canadians who have kind of given up on the idea of home ownership,” says Gregory Jack, vice-president of public affairs at Ipsos. Those sentiments are highest in British Columbia (74 per cent), Quebec (72 per cent) and Ontario (62 per cent), but lowest in the Prairies and Atlantic Canada, the polling shows.
In addition to regional divides, Ipsos’ survey shows owning a home feels more viable for haves than the have-nots: More than two-thirds of Canadians (67 per cent) agree with the idea that owning a home is only for the rich, with those sentiments rising to 76 per cent among non-owners.
While 57 per cent of Canadians disagree with the statement that owning a home is less important now than 25 years ago, those aged 18-34 are more likely to agree with that sentiment (49 per cent) than those older than 55 (38 per cent.) University of British Columbia professor Paul Kershaw studies eroding housing affordability in Canada and founded Generation Squeeze to shine light on the stark economic realities dividing generations.
He tells Global News that when the Baby Boomers entered young adulthood in the 1970s, it would’ve taken them five years of full-time work to save up for a 20-per cent down payment on a home. Today’s young adults would have to work for 17 years to hit that same bar.
We have tolerated, as a country, the massive growing gap between spiraling home prices and what’s happening with local, full time-earnings,” he says. “That is a double-edged sword. It cuts against affordability for younger Canadians and newcomers of any age trying to get into our housing market.” Kershaw says Canadians have embraced this growing divide because for those who have already broken into the housing market, an unending escalation in home prices grows their wealth. Culturally and politically, we have become accustomed to the idea that home prices will only grow, he says.
Though RBC projects the aggregate home prices to dip a modest 2.2 per cent in 2023, rising interest rates will continue to box many prospective buyers out of the market, he says. “Even if prices were to correct starting tomorrow, it would need to be a major correction, a major decline in prices to really offset the impact of higher interest rate on mortgages,” Hogue says.
Comment by Commercial Focus Realty Inc. - with home ownership now out of reach more and more renters will be entering the rental demand pool. As supply of rental apartments is thin and anorexic in places like the GTHA apartment rents are expected to skyrocket in the next decade.
WATER LEAKS AND INSURANCE
Globe and Mail - Shane Digman
“Water damage in high rise multi family space is an industry-wide issue,” said Peter Webb, senior vice-president of development for Concord Pacific Group Inc. “When there is water damage it can be rapid and expensive, and it’s causing big impacts on insurance premiums. Our interest is trying to protect against inflated premiums, and in trying to mitigate the potential of these problems.”
There have been several recent high-profile examples of the problems water can cause in high-rises. Faulty gaskets at the 49-storey Vancouver House condominium flooded 17 units in April, 2021. On Christmas Eve, a frozen pipe burst and drenched 15 floors of a 41-storey apartment building in Calgary, forcing hundreds of residents out of the building for weeks.
Insurers have taken notice. The cost of liability coverage for Vancouver-area strata corporations has risen as much as 50 per cent in recent years.
The main issue with high-rise buildings is the amount of pressure in the water system. Typical city water pressure will bring cold water up to the seventh floor or so. For buildings that are higher, you have to have booster pumps. When you’ve got highly pressurized lines – these are four-inch and six-inch lines – with even the smallest break, you can cause millions of dollars of damage in a few minutes.
That’s what happened at the Emerald condominium in north Toronto in April of last year, when a viral video captured the aftermath of a catastrophic plumbing failure, leading some wags to call the building Toronto’s Niagara Falls. But despite the deluge only lasting less than half an hour, residents are still feeling the consequences.
“We had over 200 units in this building damaged,” said Howard Keith Juriansz, a condo board director at the building. “They cleared everybody out; from floors 25 and up they had to leave.” Mr. Juriansz was unable to return to his 40th-storey penthouse apartment for five months. The water filled hallways and gushed down elevator shafts. All four of the building’s elevators were damaged (a common risk when a high-rise floods). Mr. Juriansz praised the insurance company for quick action, though he noted the building’s new insurance now comes with a steep $250,000 deductible, and the rates are higher, too. The total bill for damage and relocation costs is still unknown, but he said its already into the millions.
As a result of leaks in addition to premium hikes, insurers were raising deductibles, which between 2019 and 2020 rose 124 per cent overall in high-rise buildings, and up 96 per cent for water damage. In condos, the water damage deductibles leapt 135 per cent in the same period.
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This is the sale of a mid rise rental apartment building containing 82 suites on over 1.29 acres. The building is concrete with brick exterior, flat roof, double windows, balconies, elevator and we built in 1970. It was owned and professionally managed by Hazelview Investments. The assets had mostly one bedroom and bachelor suites and was fully marketed and purchased by Starlight Investments Ltd.
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