Today's business section of the Toronto Star reports that despite all the building, condos are in short supply and bidding wars in the rental market are just as common as those in the resale housing market. Here are some facts that has been outlined in the article.
While some 21,000 units are under construction in Toronto, only 5707 of them are in the downtown core so demand for rental condos continues to outstrip supply, housing experts say. Demand is especially up for two- bedroom units as developers opt to build one-bedroom or studios which are cheaper and easier to rent. According to one real estate agent who's been tracking the supply of condos - two years ago - there were an average of 1,300 condos for rent on the multiple listing system but present supply slipped to the 500 level.
We wonder as to what's driving this shortage especially when people see so many construction cranes that tower our Toronto skyline. Aside from the usual reasons like strong immigration to the GTA, low interest rates that allow the younger people get into the market earlier, etc. - one factor that has been overlooked is the influx of foreign students brought about the new policy which allows them to work in Canada after graduation and eventually apply for permanent resident status.
These are students who come from wealthier families (tuition is at least $25,000) and are used to a certain standard of living . They prefer to live in condos which offer the amenities and lifestyle that they're used to back home. For example, we recently found clients a 2-bedroom condo in an upscale building, within walking distance to the university. The parents refused to have their daughter stay in a dorm where showers were common for boys and girls.
This craziness is certainly frustrating for would be renters and realtors alike but quite re-assuring for our investor clients. In the end, we always hope for a more balanced market - both in resale and even rentals but it looks like Toronto still has a lot of room for growth.