The struggle to find an apartment in Toronto has become almost impossible as September creeps closer and students headed back to school set an already hot rental market on fire.
The key driver, according to agents who work with renters, is university students who are often novice renters – and whose first experience with the rental market can be a wrenching one.
“Some one-bedrooms around the University of Toronto zone are around $2,400, in the rest of the downtown it’s more like $2,100,” said Dena Shiff, a real estate agent with Sage Realty who specializes in helping renters connect with landlords who list on MLS. She says 2018’s back-to-school rental hunt isn’t much busier than 2017 – although she has seen condo units that are listed and then rented within an hour of posting – but mainly the prices are just much higher. “I’m seeing studios starting at $1,900,” she said, whereas in 2017 the same tiny spaces were more likely to rent for a maximum of $1,700.
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Collecting data on all the types of rentals in the city can be difficult, but Urbanation Inc. has been pulling records on one of the hotter segments of the Greater Toronto Area’s market since 2012: condominium apartment rentals transacted by real estate agents through the Multiple Listing System.
Urbanation’s data show that since 2012 the third quarter, which is the three-month period ending Sept. 30, has had the lowest average number of days on market for new rental listings each year. It also typically has more transactions than any other quarter, generating close to 30 per cent of the year’s total (one recent exception was 2017, where the second quarter had 8,407 rental transactions to the third quarter’s 7,784). Already, the second quarter of 2018 reached 7,754 transactions and set new price records in the data set: average rents were hitting $2,302, or $3.14 a square foot. Not surprisingly, in every year Urbanation has measured the quarter, back-to-school time nets the highest average rents in its year.
“Typical market rent is prohibitively expensive for many of our students,” said Katrina Persad, an Off-Campus Housing Facilitator with Ryerson University. “Units within their budget are often dirty, in need of essential repairs, or are located in neighbourhoods that feel unsafe to walk home in after an evening class. A hot market means that there is competition and rent-bidding on even average or mediocre units, which has pushed landlords to employ shady techniques like asking prospective tenants to submit a fully completed rental application before allowing them to view the unit.”
Online communities such as the Bunz Home Zone are filled with examples of people who have found the search for accommodation impossible and in many cases people make personal pitches hoping a landlord will see them and get in touch.
Nicholas Surges, an actor and playwright, posted one such cry for help after searching for a sublet for three months in the peak of student season. “At this point, the plan is to contact a real estate agent in the hopes that they can help us find a long-term rental for November,” he said.
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He and his roommate, Brianna Love, also an actor and writer, have applied for dozens of apartments and gone to showings with more than a hundred people present. Ms. Love had one particularly unsettling experience. “I saw a place, the smallest two-bedroom you could ever see, and the man showing the apartment said: ‘If you’re interested, there are a lot of applications in front of you. You’d have to do something pretty special to move up the list,’“ Ms. Love said. Non-plussed, she demanded to know what he meant by the remark. “I still don’t know if he was asking for money or sex. … He put up his hands and said, ‘I don’t know, I don’t know. Just saying if you want the place.’“
Ms. Shiff has seen it all, although more typically landlords want months of rent in advance, guarantors such as parents to co-sign a lease or just more money a month than the posted listing. “I just think that landlords are laughing with the vacancy rate where it is," she said. “They can pick and choose and ask for anything.” Bidding wars are now orchestrated like a high-end home, with an offer day a week after a listing is posted, and the number of bidders is rising. “Since May, I’ve always been competing with at least one; in the U of T area its sometimes six, sometimes 10 bidders,” Ms. Shiff said.
A recent Angus Reid online poll found that 59 per cent of renters surveyed would “seriously consider” moving out of the GTA in search of more affordable housing.
The poll defined four groups of Toronto residents: the happy, the comfortable, the uncomfortable and the miserable, and found that the latter two groups were now in the majority at 54 per cent of those surveyed, up from 42 per cent in a similar survey conducted in 2015. The uncomfortable and miserable were also on average younger (40 per cent and 47 per cent under the age of 35, respectively), more likely to be renting and the vast majority of those groups are ready to quit the region: 74 per cent of the miserable group would move, versus 57 per cent of the uncomfortable group.
Some minor relief might be coming in the fall: If the past is any guide, rents in the fourth quarter tend to fall back a bit from the new highs set in the back-to-school period, at least according to Urbanation’s condo-centric MLS data set. If you are subletting or toughing it out on friends' couches or in an Airbnb, take solace that the slower, chillier months tend to be a little cheaper for new rental agreements.
Shane Dingman