Rent Increase

We are fortunate to have seen the rental market rebound from the 2020-2021 lows to its current pre-Covid-19 levels for the most part. In Ontario, the residential tenancy rules allow landlords to increase rent once in 12 months with a minimum of 90 days written notice. However, such increases to rent must be made in accordance with the government approved guidelines (1.2% in 2022 and 2.5% in 2023), assuming the rental property is subject to rent control or not. Exempted properties are properties that generally were built after November 15, 2018. For more read on this topic here is the link. Our team keeps a pulse on market rents daily and 120 days prior to the anniversary of your property’s lease we review your actual rent versus market rent and determine what the increase should be. For rent controlled properties we are limited to the government approved guideline increases. However, we always catch up with the market when a new lease is signed regardless of what the rent of the previous tenant was.

TORONTO REAL ESTATE MARKET REPORT

SALES COMMENTARY

Sales for October on TRREB matched those of September and August. When you consider the normal seasonality of the market, our guess is that we have reached the bottom of the sales cycle. This represents a 49% drop in sales compared to the same month in 2021. Prices are a different matter. All property types have given back all the gains made earlier in the year. We are back to 2020 prices. But to determine which markets are most susceptible to further price decreases you should look at ‘new’ listings versus sales. For the overall market new listings are down 12% from October of last year. (It is true that ‘active’ listings are higher than a year ago but many of these properties are with sellers who will not reduce their price or are in need of upgrades). In today’s market, buyers are only interested in newly renovated properties. Fixer Uppers are out of favour. Anything below 40% is a buyer’s market. A balanced market is 40-60%. The numbers suggest we can probably expect a 1-2% drop in prices over the winter. Downtown condos are the most susceptible market due to new condo projects sold in previous years now coming into the resale market.

Customize this section by editing the text, adding your own copy, using the options above to bold, italicize, or create links and bullets, or use the options in the “Design” panel on the left to change the font styles of your email.

Source: Toronto Regional Real Estate Board. This chart plots monthly MLS® Average Price since January 1994. The blue line shows actual sales. The red line is the trend computed using a 12-month moving average, which exhibits no seasonal variations or other irregular fluctuations. A substantial change in actual sales must occur to change the direction of the trend.

AFFORDABLE HOUSING IN TORONTO

This is the most popular phrase being used by politicians at all levels of Government. But they don’t know how to define it and how to build it. The answer is not more rental housing. The Toronto Housing Authority cannot maintain even what it currently owns. The answer is through Co-Operative housing projects. But that is a topic for another day. Instead, we checked to see if there were any sales under 500,000 in the Downtown Core of Toronto. From September 1 to October 31, we found 48 sales. The average sale price was 459,356. The lowest was 335,000. These units are spread over six areas.

RENTAL COMMENTARY

The October rental market was down slightly from September. Downtown/Humber Bay recorded 1389 units leased with another 1566 units available for lease. Rents stabilized in this period as well. Leases were going for 100% of list price.