# Toronto's Real Condo Vacancy Rate (Not 1% That's for Sure)



## Berubeland (Sep 6, 2009)

I've been annoyed by the 1% vacancy rate statistic so I set on a mission to find the true Toronto vacancy rate for condos. I also unearthed a CMHC condo owner's survey that states 6.9% or 10.1% 

http://t.co/rrl3z9DcQa


----------



## none (Jan 15, 2013)

Nice work. Expect to be featured in tomorrow's greaterfool.ca


----------



## Berubeland (Sep 6, 2009)

Haha I'd love to. 

Hopefully I get even more traction. I'm so sick of hearing about the "strong condo rental market" from people who sell condos.


----------



## Cal (Jun 17, 2009)

The amount of BS being floated by that industry in general to the public is remarkably self serving. Imagine the fines that would be sanctioned to mutual fund companies/banks/investment firms if they had the same propaganda in the media.


----------



## Berubeland (Sep 6, 2009)

I contacted the Toronto Star, the Globe & Mail, the Financial Post editors and asked them to post a retraction for their factual error. 

So we will see. 

Rachelle


----------



## andrewf (Mar 1, 2010)

Berubeland said:


> Haha I'd love to.
> 
> Hopefully I get even more traction. I'm so sick of hearing about the "strong condo rental market" from people who sell condos.


Ben Rabidoux tweeted your blog post. Good work!


----------



## Sherlock (Apr 18, 2010)

I read your article with great interest, and I think you are spot on.

I have been a tenant in the GTA for about 5 years, and have lived in several different 1 bedroom luxury condos during that time and my experience corroborates your assertions. I have never had to bring all documents to a showing out of fear it would be rented out to someone else, I was always able to view multiple units and then take several days to decide and choose the best one. I did not feel rushed at all. My landlord did not raise the rent at my 1 year renewal and if he did I know there are many similar units in the same building and in several nearby buildings that I could move to for the same or slightly lower rent.

There is definitely some intentional deceit happening with the statistics we are getting from the media, and I think most condo investors believe it at first until they find out the truth after a while.

I think a problem in much of the GTA is that a lot of renters have poor or no credit, and no job or a low paying job. Often recent immigrants (especially from china) who have no job or a min wage job. Sometimes they offer to pay an entire year's rent up front, this is illegal but many landlords do it anyways. If you have a decent payign job and good credit you will not have much difficulty finding a good place to rent anywhere in the GTA, even down town.


----------



## Rusty O'Toole (Feb 1, 2012)

What is illegal about paying rent a year in advance?


----------



## none (Jan 15, 2013)

I offered to pay 6 months rent in a lump sum for a 10% reduction in my rent (or something like that). My landlord didn't go for it but gave me 4% reduction in my rent regardless.

WIN!


----------



## Sherlock (Apr 18, 2010)

Rusty O'Toole said:


> What is illegal about paying rent a year in advance?


A landlord is only allowed to ask for 1st and last months' rent, and a reasonable key deposit. He can't ask for a year of rent up front.

Theoretically a tenant could offer a year up front, and it would not be illegal for the landlord to accept if the tenant is the one who makes the offer. But the tenant could then go to the LTB the day he moves in and claim the landlord made him pay it and he was taken advantage of and blah blah blah and if the landlord cannot prove that the tenant offered to pay and was aware that it was not mandatory, then guess who's side the LTB will take. So any experienced landlord will not accept a year's rent up front even if the tenant offers.

This is in Ontario, perhaps things are different in other provinces.


----------



## Berubeland (Sep 6, 2009)

Hi Sherlock, 

This rule has changed now. Last year a Judge at the divisional court allowed it as legal, but then forced the landlord to pay the interest on the $90,000 rent deposi


----------



## Berubeland (Sep 6, 2009)

On the vacancy rate answer I discovered that CMHC is using what I consider a previously unknown method of calculating the vacancy rate even thought we already have a long standing very simple method of calculating the vacancy rate. 

I consider it quite shocking and misleading for the general public. 

The traditional method of calculating vacancy rates is you take the number of units that are for rent, you figure out how many are not rented and bingo you have your vacancy rate. Here's a more elaborate way that could be used by property managers http://www.mpmlex.com/vacancy_rate.htm or here's a gas company estimating based on the gas being off or in the owner's name http://www.mge.com/customer-service/multifamily/vacancy-rates/ 

Here is how the US Census calculates vacancy rates 

Rental Vacancy Rate. The rental vacancy rate is the proportion of the rental inventory which is vacant for rent. 

This is their vacancy tables http://www.census.gov/housing/hvs/data/rates/tab1_state05_2014_rvr.xls and even the state of New York has a 5.9 % vacancy rate. 

This is how CMHC calculates the "vacancy rate" 

CMHC called around 42,426 condo owners and 17.1 % (7212) of them have an additional condo and so they are considered Condo Investors. About 50% of these or 3606 investors rent them out. Of that group of people who are renting out their unit 6.9% (248) were vacant. 

31% (1118) of the 3606 investors had their unit for three years or less and for them vacancy was 10.1% (111) 

Now apparently, as explained to me, they take that 10.1% and multiply it by 17.1 to arrive at a figure of 1.7% arriving at a number that means nothing to me. 

As far as I'm concerned this is totally wrong.


----------



## gardner (Feb 13, 2014)

Berubeland said:


> CMHC called around 42,426 condo owners and 17.1 % (7212) of them have an additional condo and so they are considered Condo Investors.


So they are selecting for owners that own two or more units, and, I guess, are assumed to live in one of them, renting the others? Where, I wonder, did the assumption that an "investor" can't own a single condo come from?



> Now apparently, as explained to me, they take that 10.1% and multiply it by 17.1 to arrive at a figure of 1.7%


I guess because they reckon the 100 - 17 = 83% of the condos is 100% occupied by being lived in by the owners of the 17% -- or something. So if 10% of the non-lived-in condos is vacant, then 1.7% of all condos is vacant -- or something.



> As far as I'm concerned this is totally wrong.


Agreed. A total pig's ear.


----------



## showmethemoney45 (Feb 27, 2015)

gardner said:


> So they are selecting for owners that own two or more units, and, I guess, are assumed to live in one of them, renting the others? Where, I wonder, did the assumption that an "investor" can't own a single condo come from?
> 
> 
> 
> ...


I concur. this is especially important when calculating vacancy rate before buying a property and trying to determine your cash flow. Pfft. 2%? Try 10 or 20


----------



## Berubeland (Sep 6, 2009)

Well as a landlord generally you will have a tenant leave, do some fixing, and the new tenant will move in by the next month. That is an 8% vacancy rate...


----------



## My Own Advisor (Sep 24, 2012)

Just tweeted Rachelle. Great read. Nicely done!


----------



## CharlesF.Donahue (Jan 7, 2015)

Great to know about the Toronto’s Condominium Vacancy Rate, now one can easily calculate the vacancy rate for their condo with the methodology given in the above thread or post.


----------

