The first day of university or college is the first day of school experience compounded. It's all of the jitters that came with grade school, but with undoubtedly higher (and vastly more expensive) stakes. And this year, post-secondary students across Canada have even more to be nervous about; volatile rental market conditions have made it near-impossible to access reliable, affordable rental housing ahead of the school year.
These circumstances aren’t brand new. Rental demand typically heats up in university towns as the academic year approaches, and supply has trailed behind demand for decades.
But things have gotten worse. Beginning as early as May, rental markets adjacent to Canadian post-secondary schools have been hot beds of unhealthy competition, deception, and devastating horror stories.
Soaring Rental Rates Near Universities and Colleges
Grace Chan, a Toronto real estate agent with Chestnut Park Real Estate, has been advising her clients who can commute to school to do so, at least for the time being.
“I try to tell them to stay home because they’ll be competing against the international students,” she says, adding that it’s not just international students who are driving rental demand. “I'm seeing people moving in from New Jersey, New York, elsewhere in the United States to start jobs here because Toronto is a big financial and tech hub.”
But largely, local students are craving normalcy and itching to get away from home.
“Kids that have been at home during the pandemic, they really feel like they've missed out on the whole college or university experience,” she says. “They don’t want to commute. They want to live downtown.”
With students and professionals returning to the city in high numbers, competition for housing is fierce, and rental rates have nowhere to go but up.
According to a National Rent Report by Rentals.ca and Bullpen Research & Consulting, monthly rent for a one-bedroom in Toronto averaged $2,257 in July. That price is up 21.6% since last year and 4% since June. A two-bedroom in the city averaged $3,259, up 25% over July 2021 and 7.8% since this June.
And the closer you get to universities and colleges, the steeper rents tend to be.
A report released by TorontoRentals.com in June showed that the Bay Street Corridor, the downtown core, Kensington-Chinatown, and The Annex -- areas that are proximate to Ryerson, University of Toronto, George Brown College, and OCAD -- have the priciest rental rates in the entire GTA.
The GTA is not an outlier. If you look at other Canadian cities that are known for their post-secondary offerings, rental rates are soaring, and yearly and monthly increases are also drastic. For instance, Vancouver -- home to UBC, among other colleges and technical schools -- has the highest rental rates of any city in Canada. In July, one-bedroom units in the city jumped 3.6% monthly and 14.4% annually. A two-bedroom rose 4.8% monthly and 19.4% annually.
Meanwhile, Richmond, Victoria, Burnaby, Guelph, Kitchener, and Hamilton also saw double-digit year-over-year increases for both one- and two-bedroom units.
Inventory Shortfalls Leading to Bidding Wars
Current market conditions are indicative of broader issues facing Canadian housing. One systemic issue at play is a lack of inventory in Canadian markets to serve not only students but renters on the whole. According to the MLS earlier this week, Chan says that there were just over 3,200 units for rent in Toronto. At this time last year, that number was well over 5,200.
With such a disparity between available units and demand, landlords are spoiled for choice -- and it’s showing. As a result, Chan has seen a new trend emerging in full force: bidding wars for rental units.
“You’ve got ten offers on everything,” she says. “I've never seen anything like it.”
In Chan’s experience, units in certain, centrally-located areas are getting the most offers.
“Just to give you an idea, properties at College and Bay Street have been very popular. One listing came up and within eight hours there were already five offers,” she says. “Then there was just one at a Yonge and College. It was a two bedroom, two bath. It was $3,200 and it turned ten offers.”
She adds that in-demand units are renting at well above asking. For instance, a two-bedroom unit in Scarborough -- home to the University of Toronto Scarborough, and Centennial College -- recently amassed ten offers and rented for $3,100, which was $700 above the listed price.
Times are Tough for International Students
Another deeper issue exacerbating rental demand is that the number of international students in Canada has been steadily rising since the mid-2000s. According to data compiled by Statistics Canada, there were 621,600 international students in Canada in 2021. That figure is only 2.6% below the 2019 pre-pandemic peak.
Even if they’re well-qualified financially, international students are facing massive barriers when it comes to housing.
“It's really difficult for students working across three or four timezones,” says Chan. “If they’re not working, they'll need guarantors. It's a lot of paperwork. And not only that, they're competing with other people that are just as well-qualified, paying here, upfront, have guarantors. International students need to pay a year upfront, essentially, if they want a place.”
Signing a lease and paying any amount of money sight unseen is risky, but in many cases, students are backed into a corner. It comes down to taking that risk or not securing housing for the school year.
“I, as a professional, [have] never recommended it,” says Chan. “I would at least try to go down there or do a video tour. But I know that people are viewing sight unseen and there's so much fraud that is going on right now.”
Students Vulnerable to Rental Scams
This summer, Toronto has seen deceptive listings in droves. But there are listings that are pushing the boundaries of truth, and then there are listings that are flat-out fraudulent.
According to a recent report from liv.rent suspicious listings are up on their platform. In fact, the number of reported suspicious listings has increased three-fold this year compared to 2021.
Moreover, some scams are getting increasingly believable.
"They have become very sophisticated," says Chan. "There are people that rent out an Airbnb, show the place, and say that it's for rent. They'll go as far as preparing all the paperwork. And by the time the renter gets the keys, all of a sudden the cleaner comes and they realize, no, this is not a rental."
Given this reality, the Advocacy Centre for Tenants Ontario (ACTO) advises renters to cross-check listings from social media and selling platforms with the MLS. They also suggest consulting tenant rights forums on Facebook, Reddit, and Twitter, where other users may have posted warnings about scammers in the area.
Also, trust your gut.
“If something feels off about the posting and it seems too good to be true, don’t ignore that instinct,” says Douglas Kwan, Director of Advocacy and Legal Services for ACTO. “A preliminary red flag is when the rent posted is far below market rent for the area. Another major warning sign is if the alleged landlord requests any money or a wire transfer before you have viewed the unit, received the lease, or signed the lease.
Kwan also says to be wary if the alleged landlord is unwilling to speak in person, on the phone, or over video.
“If you suspect you’ve fallen victim to a rental scam, write down any information you have about the scammer. File a police report and report the scam to the Ministry of Municipal Affairs and Housing. You can also contact your local community legal clinic for assistance,” he says. “Lastly, you can file a claim with the Landlord and Tenant Board to try and reclaim any deposits you may have lost to a scammer.”
How to Beat the Rental Market Heat
With just a few weeks left in summer, Chan advises students who are struggling to secure housing to expand their search perimeters.
“It's just about setting up realistic expectations,” she says. “You might want a condo that is close to U of T, but if you don't mind traveling a little farther than you, you might be able to find something that meets your budget.”
Or, wait it out.
“I think it's just an influx at the moment, simply because we just haven't had [in-person] school for a while,” she says. “I’ve been saying this for months, if you can wait until after September 1, your search will be less competitive.”