Bidding Wars Erupt in Rental Market

The market for rental condos is becoming almost as hot as Toronto’s resale housing market with bidding wars breaking out among tenants trying to snag prime units.

While some 21,000 units are now under construction in Toronto — 5,707 of them in the downtown core — demand for rental condominiums continues to far outstrip supply, housing experts say.

That’s driving some tenants to offer up to six months’ rent in advance, or more rent than condo-owners are asking, especially for increasingly rare two-bedroom units. Click here to view the full article.

 

Usually when the resale market is hot, the rental market is not, because a lot of potential renters are buying homes. The fact that the resale and rental markets are both hot is yet another indicator of the resilience of the Toronto real estate market. As long as there is this much nascent demand for housing, a market correction of any kind is very unlikely. The tight rental market is also creating problems for move-up buyers who face the conundrum of whether to buy first or sell first. While it makes sense to buy first in a hot sellers’ market, because it’s harder to buy than to sell, many can’t afford to take the risk of carrying two properties. The alternative is to sell first and be prepared to rent if you can’t find what you want before your old house sells. But if rentals are just as hard to find as resales, then even selling first starts to look risky. The end result is to further feed the fire of the hot sellers’ market!