The rental market in Toronto has been a source of controversy lately due to significant rent increases that have upset many tenants. According to a Vancouver-based daily news outlet, Canadians lost a trillion dollars in wealth during the second quarter of 2022, with a 6.1% decline from Q2-2021 to Q3-2022. This drop, totaling $990.1 billion, was the greatest ever recorded and resulted in a total household net worth of $15.22 trillion, a decrease of $282.12 billion from the previous year. Many believe that these rent increases, coupled with the overall decline in wealth, have made it difficult for residents in Toronto to afford housing.
Both the annual growth and the quarterly drop set new lows compared to last year. After hitting record highs at the beginning of the year, stock, bond, and housing prices have since declined, bringing household net worth down to 1,003% of disposable income. This is still greater than levels seen before the epidemic, though.
As far as tenants’ outrage over massive rent increases is concerned, residents of new purpose-built buildings are very mad about the unjustified 13 percent rent increases with no room for negotiations.
These condominiums are not under rent control as they were completed after November 15, 2018. These buildings are exempt from rental increases as per the City of Toronto rental guidelines.
In 2018, the province removed rent controls for newly occupied units in accordance with a City Council agreement to encourage developers to invest in the Ontario rental market. So, all new residential units occupied for the first time as of November 15, 2018, were exempt from rent control.
Now if You are renting in a building that was built after November 15, 2018, You’re not under rent control, and it is unfortunate for renters that there is a warranted increase.
The main objective was to encourage developers to construct rental housing that was built specifically to be exempt from rental control through investment in Ontario’s rental market to assist in resolving Toronto’s housing issue caused by a shortage of low-cost solutions.
Toronto’s rental market is now so competitive that bidding wars are back and common, and rents have increased by over 20%. It can be difficult for families and especially international students to find an affordable place to live. I remember when my buyers’ customers had to deal with a multiple offer scenario while buying a house just a few months ago.
And today’s rental market has multiple offers. Because consumers are offering $200-$300 over the asking price. Sometimes they’ll pay more than two months’ rent in advance. In this environment, landlords have more power, therefore, they’re picky and look for AAA tenants. This spike in demand has shattered Toronto’s rental market.
As I mentioned in my previous blog, the FED announced a package of cost-saving relief funds for inflation to help Canadian families cope with sharply rising prices. It will also top up a housing benefit for renters by a supplemental $700 million, but it appears that this will not help and could actually exacerbate inflationary pressures.
Housing affordability is a huge concern for Torontonians, and we need affordable housing for middle-class Canadian families.
It’s amazing that the Toronto City Council unanimously accepted the findings of the 2021 Open Door Affordable Rental Housing Call for Applications. Approximately 920 rental units at affordable prices were approved across 17 separate developments.
If you have been considering Buying, Selling, or Renting your home or have avoided the notion due to a negative experience, let Arsh Syed, a Real Estate Agent in Toronto, manage the deal.
His experience and understanding have been indispensable. He desires Toronto’s housing crisis to improve. He wants to establish relationships and spread the word about his exceptional service, increasing the likelihood that renters and property owners would place their faith in him.
Arsh wants property owners to know that by hiring him, they are drastically reducing risks, saving time and saving money.
For further information about his services, please visit
https://www.real-estate-in-toronto.com or contact (416) 844-2217
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