# Apartment rents are plunging



## james4beach (Nov 15, 2012)

Apartment Rents Are Plunging in the World's Richest Cities. It's Time For You to Negotiate


Desire for space and stuck-at-home students weigh on formerly desirable areas — but for how long?




www.bloomberg.com





Downtown Toronto rents have plunged 14.5% versus one year ago. I also saw a reduction in downtown Vancouver rents (first hand) when I went looking.

A good opportunity for renters to be aggressive and negotiate lower rents.


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## calm (May 26, 2020)

I got a notice yesterday in the mail that tells me that property taxes on the building have been reduced, so my rent is now going to be reduced By 0.66%.

2019 Property Taxes - 193, 309.76
2020 Property Taxes - 186,949.27
Difference Between 2019 & 2020 - -6,360.49


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## Janus (Oct 23, 2013)

I've seen places go from $2500/month to $2100 very quickly.

And nice 2 bedrooms can be had for $2500 now... not bad!

Generic crappy 1-bedrooms are going to feel some real pain it seems.


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## calm (May 26, 2020)

Why would a city issue property tax reductions when they are short of cash to begin with?


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## Just a Guy (Mar 27, 2012)

I expect next year will be a good buying opportunity as many foolish people who called themselves landlords wake up to reality and deal with foreclosure. There will be some bargain shopping next year probably... Though how much lower than 45k can they go?


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## Beaver101 (Nov 14, 2011)

calm said:


> Why would a city issue property tax reductions when they are short of cash to begin with?


 ... market value of the property must have dropped if the mill rate set by the city didn't.


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## calm (May 26, 2020)

Beaver101 said:


> ... market value of the property must have dropped if the mill rate set by the city didn't.


In the middle of a pandemic property values decrease?
Would that be because people are moving out and too many vacant units or nobody paying rent?
I never studied the situation in my building closely, but it does not seem like owner has any problems renting.
I am asking because I paid a year in advance last February. Just because I was new in town and no bank cheque and pandemic lines at bank.
I was thinking about making an offer to landlord to pay a year in advance again if he reduces my rent by 300 per month. (Rent now is 13 hundred.)


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## Beaver101 (Nov 14, 2011)

calm said:


> In the middle of a pandemic property values decrease?
> Would that be because people are moving out and too many vacant units or nobody paying rent?


 ... drop in property value has nothing to do with whether the landlord gets to collect his rent or there's a flood of vacancies in town.

Property value tied with the property tax is determined by the provincial assessment office (MPAC for TO). * According to MPAC*, the determination of that is complex ... they compare surrounding buildings, age, sizes, the built (bricks, wood?), # of units, use, etc. (much like rocket science). I would not be surprised they don't take into account of the municipal's economy as a factor. So if you're really interested in that factor, have a look (or try to get a look) at the "assessment roll" which should be obtainable from your cityhall and look at the values of your neighbour with a building that's at least similar in size to yours and make a comparison. If your neighbour's assessment has gone down also, then it's related to the economy. If not, then there is some other determining factor specific to your building in downgrading the value of your building's property.



> I never studied the situation in my building closely, but it does not seem like owner has any problems renting.


 ... as said, rent is not tied with property value. But your landlord seem to be transparent in telling you that the property tax has gone down, hence, your portion of that in the rent goes down simultaneously. I think that's a fair thing to do.



> I am asking because I paid a year in advance last February. Just because I was new in town and no bank cheque and pandemic lines at bank.
> I was thinking about making an offer to landlord to pay a year in advance again if he reduces my rent by 300 per month. (Rent now is 13 hundred.)


 ... doesn't hurt to ask since you're paying in advance and you don't have a lease. Ie. you can pack your bags anytime (with some notice of course) and move next door for cheaper rent. As a landlord, I would want a hassle-free and stable tenant.


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## Just a Guy (Mar 27, 2012)

Property values also have little to do with property taxes as it is only used for your portion of the total amount collected. For example if the city wants to collect 10M, and there are 1000 houses in that city all evaluated at $10k each, then everyone would be expected to pay 1/1000th of 10M. Let’s say housing prices drop by 50% for everyone, you’d still be expected to pay 1/1000th of 10M. That’s how property taxes work. They set the amount they want to collect, figure out how much everything is worth and then figure out your portion of it. they do this by calculating the mill rate which is just the total amount they want to collect divided by the total value of all the properties in the city.


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## calm (May 26, 2020)

I just can't think why a city would reduce property taxes at a time like this.
Don't cities need money?
The notice I got was from the city I live in, and not the property owner.
I understand reducing property taxes on a commercial space which is closed because the tenant went bankrupt during this pandemic.
I just don't get why an Apartment building which is fully rented would get a tax break.


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## Just a Guy (Mar 27, 2012)

Short term pain for long term gain. If you put your paying customers out of business today, who will buy from you tomorrow. Better to cut them a break today instead of being greedy you can help ensure you’ll also be in business tomorrow.

Just ask Detroit how much money they get from entire abandoned neighborhoods.


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## james4beach (Nov 15, 2012)

Janus said:


> I've seen places go from $2500/month to $2100 very quickly.
> 
> And nice 2 bedrooms can be had for $2500 now... not bad!
> 
> Generic crappy 1-bedrooms are going to feel some real pain it seems.


Real pain? It's going to be fantastic!

I picked up a 1 bedroom rental at a price that many people told me (last year) would be impossible.


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## james4beach (Nov 15, 2012)

Just a Guy said:


> I expect next year will be a good buying opportunity as many foolish people who called themselves landlords wake up to reality and deal with foreclosure. There will be some bargain shopping next year probably... Though how much lower than 45k can they go?


Absolutely. I won't shed any tears for the people who over extended themselves to buy properties for unlicensed hotel operations (Airbnb).


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## AltaRed (Jun 8, 2009)

Obviously depends on where.. .In Kelowna, 1 bedroom is $1450 now versus $1350 a year ago, 2 bed about $1800 now versus $1650 a year ago. There have been up/down oscillations but that is the trend and new apartment construction is alive and well.


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## sags (May 15, 2010)

Our landlord froze our rent for another year. They have a long waiting list for units, so maybe it is other reasons than demand.


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## newfoundlander61 (Feb 6, 2011)

I noticed that our rent did not go up this fall like it normally does here in Kingston.


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## :) lonewolf (Feb 9, 2020)

Just a Guy said:


> I expect next year will be a good buying opportunity as many foolish people who called themselves landlords wake up to reality and deal with foreclosure. There will be some bargain shopping next year probably... Though how much lower than 45k can they go?


The attack to destroy the middle class with the Covid Scandle was a planned event. They knew they could never get people to vote for their agenda. The world economic forum recently put out a video of some of the things that will take place for the great reset. On their video they come out & say you will own nothing & be happy about it. Trudeau had to be payed off. No one in their right mind would build internment camps. One of the goals is to confiscate all property to pay off our debt including pensions & pay us with universal basic income. I posted a link to a leaked memo in regards to how they were planning to use the fake virus to further destroy the economy. Though a lot of my post gets removed or moved because the moderators believe everything the media & the government tells them.


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## Just a Guy (Mar 27, 2012)

Your conspiracy theory falls apart ipwith the fact that I actually own more real estate now than before. I also don’t see any camps built. Ubi also kind of fell flat when they spent 350T and ran out of money to handout...but other than those minor issues, you seem to have your finger on the pulse of something.


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## Retiredguy (Jul 24, 2013)

Question for JAG. Have you been impacted by skyrocketing insurance costs? My brother has a TH in Prince George, in a large 200+ complex and their insurance just went from 200K to 700K putting his monthly fees up from less than 300 to about 450. Complex is the type you like to buy into, where assessed values are about 75-80K per unit. He owns but the majority in the complex are low income renters and with rents declining or at least frozen these fee increases have to be hitting landlords.


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## Just a Guy (Mar 27, 2012)

Insurance does play a role, but my margins are very high, so they don’t affect me personally. I have been doing a bunch of private sales from other owners who aren’t in the same boat however...got one just recently for 40k less than the guy paid for it. He just wants outs and the costs just keep going up...


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