Looking for that perfect rental property to move into? Get ready for war. What was once unthinkable is now a reality in the City of Toronto, with bidding wars for residential rentals happening in all corners of the city.
As both a real-estate agent and a landlord, David Batori has seen it first hand.
“We did a recent renovation on a basement apartment and we were asking $1,200 (per month) and it rented for $1,480.”
Batori had four people bidding on his basement apartment and one of his client’s homes recently rented for $900 a month over asking.
It’s something the real estate veteran says he hasn’t seen in his 20 years in the business.
Shaun Hildebrand’s research firm Urbanation tracks condo and rental market activity in the GTA. Their most recent quarterly report found that rent in the Toronto condo market increased by five per cent.
“Five per cent is actually pretty strong. For a while we saw rent flatten out, because there was so much supply coming from the condo market.”
Hildebrand credits Toronto’s red-hot real estate market and a sharp decline in available rental properties as driving factors.
“Supply in the ownership market has been declining and that has in turn restricted the rental market. What we saw in the second quarter was condo rental listings falling for first time, in a long time — 15 percent year over year.”
“Not as many renters are vacating their units so it’s restricting supply and it’s creating increased competition amongst renters who are looking to get into the market,” he explained.
Hildebrand says the condo market is where he’s seen the biggest increase in rental prices but the bidding wars are happening across the entire market. He believes the rental market will remain strong with another five per cent increase expected in the upcoming quarter.
Meanwhile, Batori has advice for people looking for rental properties.
“Have your certified cheque ready and Get job letters and a credit report done. As long as you’re good, you’ll allow the landlord to make an easy decision,” he explained.
It’s not all doom and gloom though. If you don’t need to move into a rental unit right now, Hildebrand tells CityNews that you may want to wait a year or two for the demand to cool.
There are 6,000 rental units currently being built right now in Toronto. It will be the most properties that are strictly rental units to be built in Toronto in years.