Like many housing markets across the country, the Toronto region is lacking for resale inventory. In September, for instance, new home listings in the Greater Toronto Area were the lowest in two decades.
In many cases, homes are getting pulled from an ice-cold resale market – and rented out.
Over the first three quarters of this year, more than 24,000 low-rise homes were rented in the GTA, an increase of 29 per cent from the same period in 2021, according to John Pasalis, president of Realosophy Realty. His analysis focused on detached and semi-detached homes, along with freehold townhomes that were rented on the Multiple Listing Service system.
Mr. Pasalis has looked at GTA homes that were listed for sale between May and July, but did not sell by the end of August and were taken off the resale market. Of that group, nearly one-quarter of condos and about 8 per cent of low-rise homes were leased. And that doesn’t include homes that were rented outside the MLS system – for instance, places that were advertised on Kijiji, Craigslist and elsewhere.
“I think the spike this year is people who said, ‘Forget it, the market is not doing well. I’m just going to rent it out, rather than try to sell it,’” Mr. Pasalis said.
The rental market is red hot, with demand bolstered by strong population growth, while many hopeful buyers are getting priced out of homeownership by rising mortgage rates. On a per-square-foot basis, the average condo rent in the GTA jumped 17 per cent in the second quarter from a year earlier, according to real-estate consulting firm Urbanation. For some renters, it won’t be the most secure form of tenancy.
“If someone’s looking at a home that was previously or currently listed for sale and lease, it’s very possible that owner may try to sell it in the next year,” Mr. Pasalis said.
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Matt Lundy