Liberty Village Condo Market Update | December 2022
Happy New Year, LV Readers! We made it to 2023! Give yourself a pat on the back – the last few years have been hard ones. With this new year ahead of us, try not to focus on all the changes you NEED to make. Instead, this year, let’s change the notion that we need to change at all. We are perfect as we are and are all just doing our best. Alright, nobody came here for the positive self-talk… let’s talk real estate.
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 December?
December 2022 saw a total of 65 condo rentals in Liberty Village. In comparison, December 2021 had 46 condo rentals- a 41.3% increase in condo rentals year-over-year. This is very interesting, especially considering… spoiler alert… the average rental price went up significantly year over year. In order to understand one of the reasons why condo rentals were up year over year, we’re going to bring into context the sales market. If you’re following real estate in the news, you know that the sales market is uncharacteristically slow with only 12 sale transactions occurring during December 2022. If people aren’t buying, then they have to be renting, because after all, people need to live somewhere if they are required to live in Liberty Village or really want to live in Liberty Village. If you read our sales blogpost, you know that sale prices have decreased 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 interest rates exist as the barrier. Nonetheless, this means that those that are not buying are renting, and therefore, we have a very busy rental market – in comparison to December 2021.
Now, let’s dive into month over month. When comparing December 2022 to November 2022, there was a 8.33% increase in condo rentals month over month. We’re not really talking about a huge increase, but it does demonstrate a different story than usual. Historically, November tends to be a slightly busier real estate month than December. If this year has demonstrated anything, it’s that everything and anything goes. Nothing surprises us anymore!
Rental volume tells us part of the story. Let’s look at prices. Did values increase, remain the same or decrease from December 2021 to December 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 December 2022 was $2,874 on the 65 rentals. The average rental price for the rentals in December 2021 was $2,320. A 23.88% year over year increase in rental price – that’s a substantial increase! What do we attribute this significant year over year increase in price to? We’re going to loop back to our explanation above where we explained one of the reasons for the increase in demand – rising interest rates made the sales market increasingly inaccessible. If the sales market isn’t accessible, people will jump to the rental market, because, like we said, people need to live somewhere. So, even if rental prices are higher, it is still slightly more accessible to rent than buy, because if 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 shift from buying to renting also has an affect on pricing – a surge in demand (in comparison to supply) makes the prices shoot way up… and this is exactly what we saw year over year.
The average rental price in December 2022 was $2,874 on the 65 rentals. The average rental price for the rentals in December 2021 was $2,320. A 23.88% year over year increase in rental price – that’s a substantial increase! What do we attribute this significant year over year increase in price to? We’re going to loop back to our explanation above where we explained one of the reasons for the increase in demand – rising interest rates made the sales market increasingly inaccessible. If the sales market isn’t accessible, people will jump to the rental market, because, like we said, people need to live somewhere. So, even if rental prices are higher, it is still slightly more accessible to rent than buy, because if 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 shift from buying to renting also has an affect on pricing – a surge in demand (in comparison to supply) makes the prices shoot way up… and this is exactly what we saw year over year.
Now, if we look at the average rental price through a month to month lens, there is a 3.46 % increase from November 2022 to December 2022. This makes sense when we consider the increase in demand from November 2022 to December 2022. For some reason, the December 2022 market proved to be a more active one than the November 2022 – uncharacteristic but true. We’re not talking about a major increase – rather, we’re looking at a very small one.
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 current prices. Now, for those who MUST move, now is a good time. The January market tends to be sleepy one. Most people are working on their new years resolutions and getting back into the swing of things, with real estate falling on the back-burner. You may be able to secure a place with less than usual competition, or at a slightly lower price than December. If you cannot move right now, then it is important to understand how competitive the current market will almost certainly become in the next couple months.
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 very excited to see the substantial year over year increase and slight month over month increase. Now, we hear you, those with variable mortgages are feeling the brunt of the increases. Hopefully, these continual increases will make up for that. Don’t get too worried about a minor slowdown in January – this is to be expected and we don’t predict that it’ll last past January. Like most years, demand will likely soar and supply will be limited.
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 Winter or early Spring 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.
