Condo rentals have been booming in Toronto, especially in 2015 but that doesn’t mean investors don’t have cause to be skeptical of the future of that market, according to one industry professional.
“I don’t know if the trend will continue, but obviously I hope so; there are a lot of trends competing against (single condo investments in Toronto),” Brendan Powell, a real estate broker with the BREL Team Sage Real Estate in Toronto, told CREW. “A lot of rental-only buildings are now going up and that market could expand.”
Still, there is no argument that market has been a lucrative one for investors heretofore.
According to Urbanation’s Q4 statistics, the number of condo apartments rented through the MLS system last year in the GTA spiked 19%, reaching 27,166. That trend picked up steam to close out the year, as well. Total lease volume in the fourth quarter increased 26% year-over-year to 5,628 units.
However, the purpose-built rental construction increased to a 25-year high of 3,476 units last year; double the national annual average since 1990.
And that trend is one that may cause concern for area investors.
“Who knows how much that will put pressure on the market,” Powell said. “I think it’s smart to be cautious.”
Nevertheless, the long-term outlook for Toronto real estate remains strong, according to Powell. And that argument is only strengthened by the renewed interest in purpose-built buildings which, for many years, remained mostly untapped.
“The long-term vision is solid; a lot of people want to live in Toronto,” he said. “People will continue to move here.”