As a limited number of for-sale homes continue trickling onto the market, realtors are seemingly filling in the gap by handling an increased number of leases.
Broker of Record for Engel & Völkers Toronto Central Anita Springate-Renaud says she's seen an elevated number of leases coming through her office. In the first quarter of 2022, the office completed 14 leases. In 2023, that same time frame saw 51.
"It's a huge jump," Springate-Renaud said. "We keep getting more emails for people looking, even referrals from other offices outside of Canada having clients that are looking [to lease] in Toronto because there isn't inventory to buy or because people can't afford to buy."
This jump, she says, is largely symptomatic of the Greater Toronto Area (GTA) market, with her company's offices in areas like Port Carling and Collingwood not experiencing the same shift. But the key to being a successful agent is being able to adapt to the ever-changing market.
"You go with the businesses," Springate-Renaud said. "If that's what's in front of you at the time, you've just got to make it work."
Springate-Renaud notes that although most agents don't like to do leases -- they're a lot of work for a much smaller reward, typically a half-month's rent -- they're a good way to make connections with potential future buyers. And with plenty of would-be Toronto buyers having to move to the sidelines and into the rental market, thanks to rising interest rates and general unaffordability, there's certainly a large pool of future purchasers to service.
Recent data from the Toronto Regional Real Estate Board supports Springate-Renaud's observations. Across the GTA, there were 10,525 condo apartment rentals reported -- a 4% increase from the same time last year.
For agents handling these rental transactions, the market is by no means easy on the tenants' side, with rentals being snapped up left and right. On the listing side, however, it's resulted in some unusually generous offers.
"I had a listing, we couldn't sell it so we ended up leasing it and [the tenants] paid us for the whole year upfront -- that's how competitive it's getting," Springate-Renaud said. "And not only that, the rent exceeds what they would have paid for a mortgage, which is crazy."
Looking forward, Springate-Renaud sees the solution as two-fold: creating more housing stock, and implementing government regulations that help, not hurt, that mission. She points to the foreign buyers ban as a prime example of unintended consequences for bolstering housing supply.
"When they first brought the foreign buyers ban, all of a sudden we saw an uptick in development projects being delayed or cancelled," Springate-Renaud said.
Although the government made amendments to the ban shortly thereafter to exclude foreign developer investments, Springate-Renaud says it's still affecting the rental market.
"There was use in having foreign buyers because a lot of them would buy the new smaller condos as investments and then would turn around and rent them," she said. "There are so many cases of that in the city. There are a lot of decisions, unfortunately, that are made that aren't really, really well thought out."
