Has The Rental Market Bottomed?
Yes. Yes it has.
I've always wanted one of my blog posts to simply be one word. And while that probably isn't the best strategy for being found on Google, sometimes it's all that needs to be said.
Has the rental market in Toronto bottomed? Yes.
Doesn't make for a very interesting blog post so as someone who never tries to predict a market, let me tell you why I feel so strongly that the rental market in Toronto has started to see signs of life again.
I do a ton of rentals. A lot of agents won't touch a rental client because they feel it's too much work for too little money. But my business model is actually built around rentals. In the past 12 months, literally half of my buyer or seller clients have been previous renter clients, or direct referrals from previous renter clients. It's basically how I stay in business so I will never say no to a rental. Plus, how can someone realistically call themselves a "condo expert" and not be completely in sync with the rental market? Condos and rentals go hand-in-hand in Toronto. The rental market is a huge component of how and why the condo resale market works so to not be active on the rental side of the equation is a mistake to me.
In the past 6 weeks or so, I've done 13 rental deals for both landlords and tenants. And I can tell you that I'm seeing a shift. 6 months ago I couldn't give my rental listings away. We tried everything - free rent, temporary discounts...seemed like nothing worked. But heading into the Spring, I started to get more calls from renter clients who had moved home when the city shut down to save money and were now starting to look at a return downtown. What was even more interesting is that more and more of these clients were saying to me "Adil, I want to lock in a great rent before they go up again." That was very telling. Renters were starting to notice that rents were getting "cheap" enough and they didn't think prices would go down much further. Make no mistake, Toronto is not "cheap" by any means but relative to where things have been for the past several years, it's much more affordable now. Or at least it's less crazy expensive.
For all these rentals that I've done recently, I know exactly why those tenants chose to rent right now. The reason for people choosing to rent when and where they do is hugely important because it can show where the market is going and how demand is shifting.
Here's the breakdown:
2 renters simply wanted to try new neighbourhoods
5 renters were moving to Toronto for a new job
3 renters wanted to find a new place closer to their office
3 renters were moving back downtown after moving home for several months
Now I know you can make numbers say whatever you want, but 8 of these