# Podcast Interview With Simon Park



## Berubeland (Sep 6, 2009)

I met Simon Park and we did a podcast. But I had busy the whole day and didn't even have lunch so by 3 I was pretty punchy. But still it came out great so I can't complain. 

http://www.parkandjung.com/toronto-housing-market/truth-about-condo-vacancy-rates/


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## banjopete (Feb 4, 2014)

Thanks for providing the link. Interesting perspectives and definitely poking the bear in the media and marketing departments of all those involved. It's refreshing to hear some insider information and to question what we're all starting to be told are factual statistics.


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## MRT (Apr 8, 2013)

I share the skepticism regarding CMHC's numbers...but the way to challenge them is via sound analysis of data.

"Who builds apartments specifically for rent nowadays? We’ve heard in the news of some pension funds starting to look at building purpose-built rental apartments. But for the last 20 years or so, there’s been no activity on that front." 

Off the top of my head, Concert (concertproperties.com) operates several, with most being relatively new developments. An aberration? I don't know...but I would be rather surprised if they are the only player.

"According to the CMHC Condo Owner’s Survey, three quarters, or 75% of condo investors owned just one secondary condo unit. This means that most condo investors aren’t super rich or wealthy. They’re normal people with decent jobs who have saved up some money and are trying to make their dollars work hard." 

How does one infer the financial status of owners on the basis of the # of properties they own? While it might be fair to infer that someone who owns 20 additional properties is likely to be relatively wealthy (or perhaps just extremely leveraged lol), how does not owning multiple units imply "normal people...trying to make their dollars work hard"? 

Neither of these are critical points, but they speak to the confidence I have in the author's level of analysis and knowledge. IMHO, the way to challenge CMHC's figures is via analysis of reliable data. The data being hard to come by simply underscores how this is a complex issue and is not an excuse for somewhat fluffy conjecture.

Has anyone sought clarification or comment from anyone at CMHC?


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## Berubeland (Sep 6, 2009)

Yes we have actually. Bob Dugan chief economist for CMHC said the following to Jason Kirby. I also have a whole blog post where I email Benjamin Tal who is the spokesperson for CIBC and deputy chief economist and he states that he helped design the survey. He thinks it's higher but doesn't know by how much. 

Jason and I walked one building (12 York) and saw at least 100 empty units. We walked from the 52nd to the 30th floor and found that many. So CMHC would have me believe that almost 10% of Toronto's entire rental condo stock are contained in one building. 

"Dugan asserted that Toronto’s condo rental market truly is as tight as the CMHC’s 1.3 per cent vacancy rate claims. It still doesn’t add up for me.

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. Dugan rightly points out that Kijiji is not an ideal data source (as the federal department of finance found when it infamously used Kijiji for its jobs vacancy statistics). Over at Realtor.ca there are another 4,500 condo rental listings. Dugan argues that not all those units are necessarily vacant at this moment (for instance, a landlord might post a listing in anticipation of a tenant moving out) which is true. But the scale of vacancy listings relative to the CMHC’s findings bears closer scrutiny.

As for the question of declining rents, Dugan insisted I was inaccurate to write that rents for condo units declined by 1.5 per cent. He said CMHC’s analysis shows that condo rents actually rose 2.5 per cent between 2013 and 2014.

Then I read the following to him, from page six of CMHC’s most recent Rental Market Report for Toronto: “Despite the strength of demand for condominium apartment rentals this year, the fixed-sample average condominium apartment rent edged lower by 1.5 per cent in 2014 compared to the previous year. Given the increase in new supply of rental condominium apartment units this year, landlords appear to have limited rent increases, and keep rents low, in order to remain competitive.”

Dugan couldn’t explain why the report said that and suggested it might have been an error. But CMHC’s apparently erroneous rent statistic makes a lot of sense and fits with what Berube and others are seeing. A report released earlier this year by Toronto condo research firm Urbanation found that in 2014 rents rose just 0.8 per cent, compared to a 4.1 per cent increase in 2013. Which means that after factoring in inflation condo landlords saw rents drop.

Here’s a final point. Because rent controls don’t apply to properties that hit the market after 1991, condo landlords are legally able to raise rents by any amount they wish. So if the condo vacancy rate really is just 1.3 per cent—immensely tighter than in places like New York City—landlords should be in an incredibly strong position to hike rents. And yet that’s not happening. Why?"


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