This year will see a lot of new condominium projects become occupied. That has many people worried about the state of the rental market in the GTA. I am hearing from people that they are worried that they will not be able to get their property rented for a good rental rate.
This seems to go against what I am seeing in the market place. Net migration into the GTA remains strong. The job market is continuing to strengthen. Continued tightening of the mortgage rules by CMHC is making it more difficult for people to qualify for a mortgage. These are all important factors for the rental market. I am including an excerpt from the latest CMHC report. For the full report either call or email me.
The vacancy rate for purpose-built rental units will finish 2013 unchanged from last year. The average rent for a purpose-built two-bedroom apartment will increase to $1,215. The strong growth in employment in 2013 will keep overall rental demand relatively strong. In general, the vacancy rate declines along with a declining unemployment rate. Rising employment encourages some renters to become home-owners, which lessens rental demand, but it encourages even more people to enter the rental market. Modest wage growth and relatively stronger growth in part-time employment compared to full-time employment will also support rental demand. While demand is growing, the supply of purpose-built rental units is not. In 2013, only about 600 new units were added to the purpose-built rental universe. Investorowned condominium apartments have become the major source of new rental accommodation. Rents for units rented through the MLS® system have been increasing faster than inflation, indicating that this market remains relatively tight. With the market for rented condos tight, rents in the purpose-built rental market will increase by close to the 2.5 per cent allowed by the provincial guideline. In 2014, immigration will increase and more renters will stay in their current apartments rather than moving into homeownership, leading to more rental and. With only 500 rental starts expected in 2013 and a similar amount in 2014, growth in the supply of purpose-built rental accommodation will continue to be minimal. However, the number of investor-owned condos entering the market will increase in 2014. The vacancy rate will continue to remain low — 1.8 per cent in the purposebuilt market — but rent increases will likely be smaller than in 2013. In the purpose-built market, with more renters staying in their current apartments and a low provincial guideline increase, the average two bedroom rent will increase marginally. Source: CREA, CMHC forecast