Rental marketplace in Toronto
Did you know that average rents skyrocket across Canada? In our local Toronto market, we have 50% fewer condo sales in December 2022 compared to December 2021, and condo prices have been up by almost 5% since last year. Multiple offers are still the preferred method to sell for many homeowners, especially for townhouses and semis, as they are the most affordable market segment after condominiums.
Condominium rental prices in Toronto.
The average rent for a one-bedroom apartment in Toronto costs $2,500 each month, while a two-bedroom is $3,350 per month. Rents are up around 25 – 30% from last year, and the rental market poses many challenges as there is an acute shortage of rental options, especially for smaller condominiums and homes.
Average rent prices for condos in Vaughan:
One bedroom condo in Vaughan is $2,200, one bedroom plus den is 2350, and three bedrooms are $2,600.
When you enter a rental agreement for the first time, the landlord decides the rent you will pay and what services, like hydro, water, parking, etc., are included. Although rental housing prices are based on current market prices in Ontario, there are no limitations to what a landlord may ask for rent once the tenant moves out.
The current market price for a unit can be significantly higher than the tenant before you paid. There is no maximum amount of rent a landlord can charge a new tenant, with some exceptions.
How often can a landlord increase the rent?
Landlords can raise the rent for tenanted units only once every 12 months, and a minimum of 12 months must have passed since the tenant moved in.
What is not rent-controlled?
New residential apartment buildings, condos or houses that were occupied for the first time as of November 15, 2018, are not rent-controlled. Landlords can increase the rent year-to-year to whatever they want and are not required to follow any guidelines. They must, however, wait 12 months before they can request an increase and give 90 days’ notice.
A clause in rental agreements is being used often lately. It reads: “Tenant acknowledges there are no rent increase limitations after (1-year lease is over)”. This is valid for properties built after November 15th, 2018. Dwellings built before November 15th, 2018, are subject to government rent increase guidelines with a maximum increase amount based on the yearly guidelines.
🔹In 2020, the limit was 2.2%.
🔹In 2021, the limit was 0% due to the pandemic.
🔹In 2022, the limit will be 1.2%
If you consider offering your property for lease, you may use rental properties websites in Toronto, and I suggest the following process with your rent candidates.
Be thorough on all tenant applications.
✔ Meet the applicants in person, where possible
✔ Ask a lot of questions
✔ Review physical copies of documents, if possible
✔ If they agree, ask them to log into one of the credit check companies in person to verify the legitimacy of their reports and credit score.
✔ If possible, ask for and verify at least three references for work, personal, and previous landlords.
✔ Carefully examine ALL documents and look for inconsistencies
✔ Be cautious of anyone that:
Will sign up for a lease without a showing first, seems overly anxious to sign the lease documents and move in, and wants you to delay their identity and document checks until after the lease is signed.
If you are a tenant, consider the essentials:
With money scams on the rise, watch out for these IMPORTANT RED FLAGS in the rental market.
✔ Poorly written listings, along with blurry photos and obscured address details.
✔ Rental amount lower than what similar units or homes in the area offered to lease
✔ A hurry to secure a rental deposit always deserves extra scrutiny
✔ Request that a deposit or first and last month’s rent be sent to the “landlord” via wire transfer before a property may be viewed or to secure the lease
✔ Due to unavoidable circumstances, no in-person visits are possible.
✔ Peter-the-Landlord or variations of other names – ask the landlord to show a photo ID before sending any funds. Money is hard to make and easy to lose, especially if you tend to trust people more than they deserve.
Suspicious rental advertisements are placed on different websites, including Kijiji.
Use a real estate agent.
Real estate agents do all the legwork to find the right place. And tenants do not pay a penny for the service — the unit owner pays the fees.
WHAT TO EXPECT?
The medium-to-longer-term outlook for rents is strong, and demand will continue to outpace supply. Reduced ownership affordability pushes more would-be first-time buyers with higher income levels into the rental marketplace. Rental markets are expected to come under increasing pressure. In addition, the anticipated arrival of 432,000 new permanent residents next year who will likely settle in Toronto and cities near Toronto will support price growth.
If you are considering leasing your condo, I recommend using real estate services. Realtors can filter out a lot of stuff and save you valuable time.