# What Is The Toronto Vacancy Rate?



## Berubeland (Sep 6, 2009)

http://www.macleans.ca/economy/realestateeconomy/the-vacant-truth-about-rental-condos/


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## MoreMiles (Apr 20, 2011)

Note to myself... do not hire her as my investment property manager. She bites the hand that feeds her... and proud of it too. 

End of note... sigh...


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## GoldStone (Mar 6, 2011)

MoreMiles said:


> Note to myself... do not hire her as my investment property manager. She bites the hand that feeds her... and proud of it too.
> 
> End of note... sigh...


Yeah, hire some bullshitter who will tell you exactly what you want to hear.

MM, you don't get it. Rachelle is doing you a favour.

False vacancy statistics = more naive condo investors = more condo overbuilding = bigger crash in the end.

Is it what you want?


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## sags (May 15, 2010)

So there are tons of empty rental condos whose owners need higher rent to pay the mortgage...........and renters who can't afford the asking rent.

Only 2 ways this can go.

The renters suddenly get paid more money............or the rents come down.

The lucky landlords will be the ones who only subsidize their renters for a few hundred a month, rather than paying thousands a month for an empty unit.

The smart landlords will be on the phone to Rachelle................


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## none (Jan 15, 2013)

Berubeland said:


> http://www.macleans.ca/economy/realestateeconomy/the-vacant-truth-about-rental-condos/


Congratulations. That's great.


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## Pvo (Jul 4, 2013)

Nice article. Congrats


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## OnlyMyOpinion (Sep 1, 2013)

leo said:


> *hello* the condos are on high demand & vacancy rates are even lower than that.
> I would suggest bratch realty to know about real estate investments & vacancy rates.
> Hope it will help you out. Cheers


*troll*


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## Berubeland (Sep 6, 2009)

Actually MoreMiles I do a great job as an investment property manager. My internal vacancy rate is 3.1% or a full 2 percentage points below the market. 

As a person with integrity I can't help but be extremely concerned about the market. 

That Ice Condo is a great example. I rented mine in a couple weeks. There are 11 suites one every floor and only 10 were occupied. I was shocked particularly when Jason Kirby and I walked every single floor all the way to the 40th floor and every floor had a minimum of 7-8 empty suites. It was only when we got to the 30th that there were only 3-4 empty per floor. 

The auction atmosphere was pretty amazing and so was the ad posted by a tenant on kijiji offering to rent a one bedroom for $1300 in that same building. 

At 8 Mercer, which was the most unfinished building I've ever rented a suite in, the tenant had shopped so much she knew all the layouts and selected my suite because in was beside the rooftop garden and she can get wifi from her apartment while enjoying the rooftop deck. That is the type of selection that tenants have. Does this sound like a balance market to you? 

Of greater concern is the fact that the agency that is supposed to provide accurate statistics to the Canadian Public and policy makers has changed the definition of Vacancy rate to reflect something completely different and frankly, meaningless. The initial population they drew from was condo owners. They could have picked the random public or people who have dogs for their survey. What matters when calculating the vacancy rate is the people who own rental condos. Here's what I wrote about that search. http://landlordrescue.ca/the-truth-about-current-vacancy-rates/

Not everyone is my client. It's completely fair to say that if you just want good news I'm probably not the property manager for you. I think the more educated my clients are the better off we both are as you will let me do my job. My job in Ice condos was to rent my owner's unit despite the 40 other basically identical listings that were on at the time. Mission accomplished. 

From the window of that mostly vacant building I could see roughly another 20-30 buildings nearing completion. They are building another 57 floor tower on the same site right next door. 

Now pension funds are getting in the game. They are building "condo like rentals" not affordable housing. I'm sure they are using the statistics given by the ever helpful CMHC to make their decisions. What happens to the ma & pa investors who are already putting in hundreds of dollars per month to subsidize their tenant's rents as these pension funds build their condo like rentals in a over 10% vacancy rate environment?


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## MoreMiles (Apr 20, 2011)

Thank you for sharing your view. However, I do not think I can agree with it. Yes, there are lots of vacant units. It is also my opinion that Toronto real estate market is changing fast this year.

Most low-rise houses are becoming unaffordable to working-class Canadians. They are taken up by retiring baby-boomers who have saved up huge assets and wealthy foreign investors. It is expected that if you are just in your working ages with salary income, you should just look at condos.

It is already like this in many cities including New York City, Hong Kong, and London UK. Nobody there would expect to buy a detached or semi-detached house while he or she still needs a mortgage. How can you mortgage $1 million?

Once these priced-out buyers have nowhere to go, they have to either rent to wait or buy a condo. This may take another couple of years to occur because the detached homes have just skyrocketed in Toronto in 2014.

The single detached houses were going for 600-700k just a couple of years ago in North York and Richmond Hill. Now they have doubled in just 2 years. Guess what? If the banks still offer 0.5% for savings and keep loose monetary policies, the wealthy ones will have no choice but to put their asset on real estate. The hot money is just too hot... It has tripled S&P500 stock index in just a few years so why would you be surprised at all if our house prices are tripled too? 

I think those who believe in S&P index investment but refuse to believe in real estate are just hypocrite. They go hand in hand.


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## Causalien (Apr 4, 2009)

Rachel

I plan on returning to Canada this Summer, do you think it's a good time to rent a place in TO? Or wait another year for the rent to drop?


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## none (Jan 15, 2013)

MoreMiles, you post has nothing at all to do with what Beru is talking about. She's talking about the disconnect between statistics and reality -- I think you're upset that she isn't complicit in the con.

This is why I really dislike many people into real-estate. They have little shame in being little more than snake oil salesmen and conning people out of their hard earned money.


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## Beaver101 (Nov 14, 2011)

Berubeland said:


> Actually MoreMiles I do a great job as an investment property manager. My internal vacancy rate is 3.1% or a full 2 percentage points below the market.
> 
> As a person with integrity I can't help but be extremely concerned about the market.
> 
> ...


 ... your article is a realistic reflection of the condo market in Toronto - nice going on that article. :rugby:

Re "pension funds" are getting in the game - this is interesting. If I read the above correctly that they're not using these condos as rentals, does that mean they're flipping them and are they allowed to do that?


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## Berubeland (Sep 6, 2009)

My understanding is 

http://business.financialpost.com/n...ers-as-rental-market-heats-up?__lsa=7c73-d7db

They are not flipping them. There is 13% of HST to pay on a flipped property.

That's why condo buyers are the most altruistic people in the world. Their "friends and family" are living rent free in their new condos. In case you too were wondering why so many condo buyers are housing an unusual number of family members.


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## Just a Guy (Mar 27, 2012)

I really don't understand why people are shocked by this. If you are, you probably believe we are living in low inflation too because the government says so, or that unemployment is low, or that jobs are on the rise...

There is an old joke about a guy who was hiring an accountant, he asked his candidates what 2+2 is...

The first said 4

The second said somewhere between 3 and 5

The final one asked, what do you want it to be?

The same applies to statisticians it seems in my experience.


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## none (Jan 15, 2013)

As a statistician I resent the implication. Indeed, it seems that it's the hacky non-statistician that are not treating their data correctly that are having the issues.

I always find the saying: you can lie with statistics. Sure you can, but generally statistics is hard so you might as well skip the stats step and just start off by lying. The whole point of stats is to identify signals in noisy data thus making for better inference. I.e Make lying harder.


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## Berubeland (Sep 6, 2009)

Yep go for a new build or even a surrounding building. The rent drops in the entire area. To see where they are just open the MLS map and look for rent and you'll see 20-30 listings in one spot. Now go to kijiji and google that address and bingo bob's your uncle. 

For instance have a look at 8 Mercer the other address I just rented in last month. 36 just on MLS. http://www.realtor.ca/Map.aspx#Cult...titude=43.69505912&ZoomLevel=13&CurrentPage=1

Do you think buildings across the street are not affected?


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## andrewf (Mar 1, 2010)

You can't blame statistics for people lying with numbers and superficially believable data. Statistics is, if anything, about spotting the bullshit. The con artists only get away with it because the general public is innumerate.


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## Berubeland (Sep 6, 2009)

It has nothing to do with statistics. Someone somewhere sometime decided to redefine the calculation for vacancy rate so they would end up with a very small number. 

Also Jason edited the article after speaking to CMHC http://www.macleans.ca/economy/realestateeconomy/the-vacant-truth-about-rental-condos/

CMHC is currently sticking by their number of 1200 condos currently for rent in Toronto even though there are currently 12000 on kijiji, 4600 on mls and obviously many many more rental sites. 

Apparently they are asking property managers and board members of condos what apartments are for rent even thought neither one of these sources would have access to that information. 

Frankly it's pretty impossible to have a 1% vacancy rate. Real estate has a physicality and 1% is impossibly low to move people in and out. It means that most tenancies would be back to back with one tenant leaving as another moves in. This is simply not true.


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## OnlyMyOpinion (Sep 1, 2013)

As it reads to me, Mr. Dugan is a diggin' a deeper hole everytime he speaks. Is anyone optimistic that the CMHC will consider this as an opportunity to revisit some of their methods and analysis? Me neither


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## Berubeland (Sep 6, 2009)

No I don't but I'm pretty sure CMHC has never met anyone like myself yet either...


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## gt_23 (Jan 18, 2014)

I don't think the author of the MacLean's article know what he's talking about.

He argues that the 5,700 rental listings on Kijiji weaken CMHC's number of 1,200 vacancies in rental condos. It's a pretty amateurish move given the battle he's trying to wage. He's effectively equating vacancy and availability which are completely different metrics. Listings on Kijiji and rental websites aren't usually for vacant condos/apartments, but rather for units where the tenant has stated their intention to move in the future and the owner is renting it out for some future date. Instead of representing vacancy, these numbers represent nothing more than a current snapshot of the turnover in the rental market, which is not an alarming number given the size of that market. Furthermore, rental owners post these multiple times repeatedly on the same or other internet sites, so simply adding them all together in aggregate is indicative of nothing. Rachel, I would expect you to know better, especially if you're trying to be objective.

Finally, wrt to the reference of 8 Mercer in Toronto, this building hasn't even completed yet so it and other buildings in similar stages of development should not be included in a vacancy report. I think it's a huge stretch and a poor example to try and draw any insights on the whole market from a subset of new condo developments during occupancy.


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## Eclectic12 (Oct 20, 2010)

andrewf said:


> You can't blame statistics for people lying with numbers and superficially believable data. Statistics is, if anything, about spotting the bullshit. The con artists only get away with it because the general public is innumerate.


Innumerate or entranced with numbers so that the brain does not kick in.

Describing co-workers that aren't following schedule? Management response is that it's to rare to bother dealing with.
Describe that instead of the scheduled twelve times a month, co-working are going with twenty eight times a month? Management panics.

The hilarious part for me was that I could have been making the numbers up as there was no verification of the numbers. :biggrin:


Cheers


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## Berubeland (Sep 6, 2009)

gt_23 said:


> I don't think the author of the MacLean's article know what he's talking about.
> 
> He argues that the 5,700 rental listings on Kijiji weaken CMHC's number of 1,200 vacancies in rental condos. It's a pretty amateurish move given the battle he's trying to wage. He's effectively equating vacancy and availability which are completely different metrics. Listings on Kijiji and rental websites aren't usually for vacant condos/apartments, but rather for units where the tenant has stated their intention to move in the future and the owner is renting it out for some future date. Instead of representing vacancy, these numbers represent nothing more than a current snapshot of the turnover in the rental market, which is not an alarming number given the size of that market. Furthermore, rental owners post these multiple times repeatedly on the same or other internet sites, so simply adding them all together in aggregate is indicative of nothing. Rachel, I would expect you to know better, especially if you're trying to be objective.
> 
> Finally, wrt to the reference of 8 Mercer in Toronto, this building hasn't even completed yet so it and other buildings in similar stages of development should not be included in a vacancy report. I think it's a huge stretch and a poor example to try and draw any insights on the whole market from a subset of new condo developments during occupancy.


There are over 12,000 listings on Kijiji and 4600 on MLS. CMHC is saying that there are only 1200 condos for rent in Toronto. Surely you are not trying to tell me that all the condo owners are reposting their ads on the MLS 4 times and 10 listings on kijiji for each apartment. Sure some of those suites are not vacant and the owner is trying to rerent them, but a lot also are vacant. 

The new condos are just as much a part of the rental market as the old ones. Even apartments under renovation are included. 8 Mercer and 12 York and Singer Court Discovery Buildings and Emerald City are all included. These units used to be absorbed instantly into the market. Now the apartments are sticking around for months, and months and even cause a ripple effect in the surrounding buildings. 

CMHC needs to seriously revisit their numbers. They also claim that there is a 1% vacancy rate in purpose built housing. That's also astonishingly low, yet every building I pass has open house and for rent and view it or gottarent signs outside. They also have extended and weekend hours. You know you can go check yourself. I challenge you to find a building that doesn't have vacancy. The market is nowhere near as tight as CMHC is saying it is.


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## gt_23 (Jan 18, 2014)

Berubeland said:


> There are over 12,000 listings on Kijiji and 4600 on MLS. CMHC is saying that there are only 1200 condos for rent in Toronto. Surely you are not trying to tell me that all the condo owners are reposting their ads on the MLS 4 times and 10 listings on kijiji for each apartment. Sure some of those suites are not vacant and the owner is trying to rerent them, but a lot also are vacant.
> 
> The new condos are just as much a part of the rental market as the old ones. Even apartments under renovation are included. 8 Mercer and 12 York and Singer Court Discovery Buildings and Emerald City are all included. These units used to be absorbed instantly into the market. Now the apartments are sticking around for months, and months and even cause a ripple effect in the surrounding buildings.
> 
> CMHC needs to seriously revisit their numbers. They also claim that there is a 1% vacancy rate in purpose built housing. That's also astonishingly low, yet every building I pass has open house and for rent and view it or gottarent signs outside. They also have extended and weekend hours. You know you can go check yourself. I challenge you to find a building that doesn't have vacancy. The market is nowhere near as tight as CMHC is saying it is.


I think you missed my point, so I'll try again. From the MacLean's article:

"For one thing, CMHC’s analysis indicates there are just 1,200 condo rental units currently vacant (or at least as of the survey date last fall) in the entire Greater Toronto Area. Right now on Kijiji.ca there are roughly 5,700 condo rental listings. "

Rental vacancies are not the same as rental listings. The fact that there are 5,700 rental listings (or even 12,000 + 4,600 as you suggest) has nothing to do with vacancies, since many of these listings are for units that are not yet vacant and the landlord will rent them back-to-back before they ever become "vacant." The vacancy metric is supposed to be an indicator of excess supply over demand, while listings (or more properly, availability) should better reflect the turnover or activity in the market. You can have lots of turnover and still low vacancy as long as demand is high relative to supply.

I think the change over time of the vacancy rate is much more instructive than it's absolute measure. In most Ontario/GTA rental markets that rate has decreased y/y which suggests that demand is growing faster than new rental supply (probably also a function of increasing costs to buy a property).


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## Berubeland (Sep 6, 2009)

Gt23

I understand your point, but you make some assumptions that are incorrect.

1-Most condos rent back to back and are advertised before whereas I would say that maybe 15% of landlords are trying to rent with no vacancy period. I'm one of them and I manage 1/3 of the time. 

Yes the CMHC vacancy rate has decreased year over year. But here you have a person who works in the industy and who's job it is to rent said apartments telling you those numbers are false. In the condo market I actually asked CMHC and figured out why the number is irrelevant. (They include the great population of owned condos into their vacancy rate calculation) This is incorrect. 

Their number means nothing. And it's glaringly wrong. 

Their number means that every month 99 people are moving in back to back with no free days of vacancy at all and only one condo will stay unrented out of 100. 

or that number means that every unit in Toronto is rented within 3.65 days. 

In a market that tight, and the rental market has been that tight before... rents go up and there would be report in the newspapers of the problem of finding new housing. I would have 80 people show up for my showing again, some with cash in hand ready to make a deal. 

I wish. 

A 1% vacancy rate is impossibly low. 5% is a balanced market, anything below 5% and rents start going up. Above 5% and rents start trending down.


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## marina628 (Dec 14, 2010)

My daughter is in the market to rent one of these condos in the $1200 -$1600 range in the Parklawn/Lakeshore BLVD area and I cannot believe the number of units to choose from ,it is definitely good for renters these days and we have seriously looked at purchasing one of these but when you add in the $400 maintenance fees , $150 -$200 monthly property tax payment ,insurance etc not to mention the mortgage payment we may as well let her rent.


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## MoreMiles (Apr 20, 2011)

http://www.financialpost.com/m/wp/n...iving-up-on-home-ownership&pubdate=2015-04-15


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## MoreMiles (Apr 20, 2011)

And this too:
http://www.cbc.ca/m/news/topstories...-439-144-in-march-from-year-earlier-1.3033636

Soon, many people will be forced to rent. It will be a battle between the wealties and working class. But please be reminded that many public servants are on sunshine lists so they would not want to see a major market crash either. People want status quo and stability.


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## none (Jan 15, 2013)

What about non-public servants on equivalent sun-shine lists? Frequently private sector employees are paid better than government - don't forget those people.


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## MoreMiles (Apr 20, 2011)

My point is that those with power (ie politician / law makers) also have asset they want to keep. I don't think they will be too happy to see their nest egg getting a 50% haircut. So do you think they will make laws to force a recession or market crash? On the contrary, they would do everything (including more money printing) just to keep our monetary system status quo.


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## none (Jan 15, 2013)

People generally over estimate the blunt tools regulators have at their disposal. If it's coming, it's coming. you can delay for a while but things are called inevitable for a reason.


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## gt_23 (Jan 18, 2014)

MoreMiles said:


> My point is that those with power (ie politician / law makers) also have asset they want to keep. I don't think they will be too happy to see their nest egg getting a 50% haircut. So do you think they will make laws to force a recession or market crash? On the contrary, they would do everything (including more money printing) just to keep our monetary system status quo.


70% of Canadians own their homes and I don't think any of them would be happy with the scenario you describe. Everyone (owners and renters) would be impacted by a real estate crash in some way, which is why the Gov't will never let it happen or at worst, do everything it can to mitigate the damage.


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## Berubeland (Sep 6, 2009)

Ok so in the first Financial Post article... rents going down. 22 square feet is the size of a closet. This is highly indicative of vacancy to me not shrinking unit sizes. 

Overall, the average monthly rent was down 1.8 per cent from a year ago to $1,790 — the lowest in three years — but that’s largely because condo units continue to shrink. The average condo was 756 square feet in the first quarter, 22 square feet smaller than a year ago.


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## andrewf (Mar 1, 2010)

I have to think regulators must be getting very worried about the Vancouver and Toronto markets. They've done enough at the national level to damped house price rises outside of these cities, but if prices continue to escalate at the rate they are in Vancouver & Toronto, they are setting the stage for a major correction. I wonder if they will try to implement regional mortgage insurance caps or something to try and tighten the markets in GTA and Vancouver specifically.


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## Berubeland (Sep 6, 2009)

There' no problem here. We don't know what you are talking about :hopelessness:


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