How is everyone doing this lovely October day? You likely already have your sweaters out and parka on standby – sorry to break the bad news but 75% of Canada’s provinces will see snow next week.
Attention Landlords and Renters!!
If you are think of renting out your condo and you’d like to learn more about the services we offer, have a look at our hugely popular blogpost- Landlord Services in Liberty Village.
If you are thinking of renting a condo and you don’t know where to start, take a look at our hugely popular blogpost- Everything You Wanted to Know About Renting Your First Condo in Liberty Village.
How Many Condos Rented in Liberty Village in September?
September 2022 saw a total of 95 condo rentals in Liberty Village. In comparison, September 2021 had 69 rentals- a 37.68% increase in condo rentals year-over-year. Now, September is known to be a busy real estate month, so it’s no surprise that there were 95 condo rentals this month. Although, we are talking year over year, and a 37.68% is a substantial year over year increase. So, why is this the case? We’re going to bring into context the sale market in order to understand why the rental market is so busy. If you’re following the real estate in the news, you know that the sale market is uncharacteristically slow with only 15 sale transactions occurring during September. If people aren’t buying, then they have to be renting, because after all, people need to live somewhere if they are required to or choose to live in Liberty Village. If you read our sale blogpost, you know that sale prices have decreased slightly year over year – now, this is a slight entry-point for those buyers who couldn’t afford the prices last year. Although, there is the factor of substantially increased interest rates that make buyers purchasing power much less. So, even if prices are slightly lower, the barrier stands in the interest rate increase. Nonetheless, this means that those that are not buying are renting, and therefore, we have a very busy rental market – in comparison to September 2021.
Now, let’s dive into month over month. When comparing September 2022 to August 2022, there was a 20.25% increase in condo rentals month over month. Now, September is characteristically a more active market than August, because it marks the transition between the end of Summer and beginning of Fall. Students or workers who require a home base in the downtown core of Liberty Village are eagerly trying to secure a place for the start of the school/work year. Many also prefer to move when the weather cools down from the hot summer months, but before snow falls – September is this mid-point. This year, however, it seems, no matter the season, the rental market is going crazy. We’ll see later on with year-over-year prices, how crazy the market really is.
Rental volume tells us part of the story. Let’s look at prices. Did values increase, remain the same or decrease from September 2021 to September 2022? Let’s take a look at the average rental price for all types of condo rentals year over year.
The average rental price in September 2022 was $2,733 on the 95 rentals. The average rental price for the rentals in September 2021 was $2,405. A 13.64% year over year increase in rental price – wow, what an increase! We’ve seen in previous blog posts that when prices increase substantially, the barrier of entry raises in the rental market. In turn, less are able to access the rental market downtown or in Liberty Village, and there usually is a decrease in number of rental transactions in a given month. We definitely didn’t see that this year or month – we saw increases in both year over year and month over month rental transactions. So, why the increase in transactions if prices have taken a leap? We’d like to point you back to our explanation above where we cite why transactions have gone up – because the sale market has grown largely unaccessible because of rising interest rates. Even if rental prices are higher, people have to live somewhere. And where you can’t qualify for a mortgage, or you’re unable to obtain a mortgage with an adequate budget for downtown or Liberty Village, the rental market becomes the only option.
The average rental price in September 2022 was $2,733 on the 95 rentals. The average rental price for the rentals in September 2021 was $2,405. A 13.64% year over year increase in rental price – wow, what an increase! We’ve seen in previous blog posts that when prices increase substantially, the barrier of entry raises in the rental market. In turn, less are able to access the rental market downtown or in Liberty Village, and there usually is a decrease in number of rental transactions in a given month. We definitely didn’t see that this year or month – we saw increases in both year over year and month over month rental transactions. So, why the increase in transactions if prices have taken a leap? We’d like to point you back to our explanation above where we cite why transactions have gone up – because the sale market has grown largely unaccessible because of rising interest rates. Even if rental prices are higher, people have to live somewhere. And where you can’t qualify for a mortgage, or you’re unable to obtain a mortgage with an adequate budget for downtown or Liberty Village, the rental market becomes the only option.
Now, if we look at the average rental price through a month to month lens, there is a 14.94% decrease from August 2022 to September 2022 – now, this seems like an uncharacteristic decrease, but we have to look closely at the numbers to understand this difference. August 2022 had lots of out-of-the-ordinary high-end rentals – now, what does this mean? It means that 5 transactions sat above the $4,000/month mark, with the highest two being $5,700/month and $5,900/month. In comparison, September 2022 had only 1 transaction above the $4,000/month mark, with 72 transactions falling below the $3,000/month mark. It’s easy to just quickly glance at the decrease and assume that prices have fallen month over month. Although, sometimes a deeper dive is necessary. If we level out the playing field and only include one $4,000+/month transaction in August 2022, then the average sale price falls to $2,767, which makes the month over month decrease a mere 1.24%. This is still a decrease, but a much smaller one at that. We did mention that prices tend to fall the colder the weather – and the weather has been colder – so this may be a factor for the very slim price decrease month over month.
So, What Does This Mean for Renters?
Last month, we gave you two sets of advice – one, to those who are able to stay put, and the other, to those that MUST move. We said, “if you are able to stay put, stay put. We understand that this isn’t the case for everyone. Some people have to move downtown for a new job, school, an ending lease, etc. But, if you’re able to stay in your current place, that is the best option. Why? Because your current monthly rent will be significantly less than the same unit with September 2022 prices. Now, for those who MUST move, we would recommend waiting until September. If you cannot wait until September, then it is important to understand how competitive the current market is. Many renters move back to Toronto towards the end of the Summer to begin school or work in the Fall, so this makes mid-end Summer a very competitive, hot rental market. We are currently seeing units flying off the market in 2 hours with 3 offers, site unseen. It’s THAT crazy. Waiting until September allows you to avoid that craziness and compete in a more level-headed market”.
So, it’s now October and you’re probably wondering if our two sets of advice stand. We are here to tell you that, if you HAVE to move downtown, now and throughout the winter is the time to do it. Most people do not enjoy moving when it is cold or there is snow on the ground, so it is a great time to get a marginally lower price (when looking at month over month prices) and have less competition when doing so. From the number of rental transactions in September, we know that it was an insanely busy month, so there are likely still renters who didn’t score a unit in September who are still looking for a place now. This may mean that there is carry-over demand from last month. Now, if you can stay put in your current unit downtown, then you’re good as gold. There will be no current price that can beat the deal you scored last year or earlier.
If you want to get your condo search started now or in the near future, email our rental specialist Kylie or fill out our Contact Form.
So, What Does This Mean for Landlords?
If you’re a Landlord, you’re thriving in this crazy rental market. Don’t focus too hard on the very tiny price decrease – we know that prices stay the same or slightly dip during the colder months – less demand can do that. If you price your unit correctly (according to market value), units are still going rapidly at asking price or above. It IS still an absolute “Landlord’s Market” and a fantastic time to rent out your unit, despite it getting colder outside. We mentioned demand carry-over in the above section, and that will be a benefit to Landlords who weren’t able to take advantage of the insane Summer market – there’s still lots of renters who didn’t find a place in September due to the demand largely exceeding the supply.
Set yourself up for success by touching base with a rental expert as soon as possible. Our rental specialist, Kylie, will keep you privy to all comparable leased units in the meantime, prepare a thorough marketing strategy and ensure you are on the best track to get major dollar for your unit. To learn more about the Landlord services we offer, have a look at our hugely popular blogpost- Landlord Services in Liberty Village.
Any predictions for the remainder of the Fall or early Winter market? Let us know in the comments below.
If you have any specific questions about the market or are curious as to how this relates to you, get in touch. Email our rental specialist Kylie or fill out our Contact Form.
