Toronto Experiencing A Rental Renaissance According to New Report

Toronto is experiencing a rental renaissance due to the number of new apartment units under construction hitting a 25-year high this year.

There were 26 apartment buildings under construction in the Toronto area in the third quarter of the year with more than 6,500 rental units, according to a new report by Urbanation Inc, real estate market research firm.

Many developers and institutional investors are prompted to make bets on the rental market due to the strength of the condo rental market, along with the record-low rates and land and constructions costs that are rising faster than prices for new condos.

“The experience of the condo rental market has been key,” said Urbanation senior vice-president Shaun Hildebrand. “Despite record volumes of investor-held supply entering the market, vacancy rates have remained extremely low. I think that has given developers confidence to move forward with rental, and they see demand remaining strong while condo construction moderates.”

The increase in rentals also comes as the city is undergoing a surge in new condo development. There are eight times more condos under construction in Toronto than rental units, Mr. Hildebrand says, and many of those condos will likely be purchased by investors who also plan to rent them out.

Reference: The Globe and Mail

http://www.theglobeandmail.com/…/toronto-e…/article26817083/