Toronto Star article by Susan Pigg indicates that all those 20-something echo kids who have been living at home after the 2008 recession are now finally moving out of their childhood bedrooms and venturing out into the real world.
The only problem is that its fuelling intense demand for rental accommodations so much so that bidding wars for rentals are quite common and vacancy rate on these condos are at around 1 per cent. Well priced rental propertiesd don't stay on the market for more than a week and we're not even at the peak rental period which is around May.
Why this sudden high demand for rentals?
- Many of these young adults want to be close to where the action is - where their friends are and a lifestyle that offers easy access to restaurants, shopping and great amenities which condos offer.
- A good number of them would rather walk or commute to work. Less and less of them even bother to go for a driving license and would not bother spendng money to maintain a vehicle. Between monthly payments, insurance and gas - a car can easily set you back $500 a month.
- The job market has picked up - employment is at its highest level since the recession in 2008.
- Foreign students make up a good number of these renters
This recent phenomenon has eased some fears of housing officials - that a downturn of sales in the condo market will push investors to unload and sell their properties at bargain prices.
It seems that at this point, investing in a condo for rental purposes has proven to be lucrative so much so that recent reports show that only 6 per cent of these newly-registered condos are sold and about 20 per cent are rented out.
So Boomers - rejoice! There is a bright light up at the end of the tunnel...