TORONTO CMA CONDOMINIUM APARTMENT MARKET OVERVIEW - - PowerPoint PPT Presentation

TORONTO CMA CONDOMINIUM APARTMENT MARKET OVERVIEW

• 49% Quarterly Increase in Activity on MLS in Q2-2012.
• Index Rents up 3.5% Annually to $2.26 psf in the Toronto

Toronto’s Condominium Apartment Rental Market Remains Strong

• Index Rents up 3.5% Annually to $2.26 psf in the Toronto

CMA overall.

• Lease-to-Listings Ratio of 78% - Extremely Strong

Demand.

• Average Suite took 19 Days to Lease in the Second

Quarter, compared to 24 in Q1-2012.

Toronto CMA Rental Markets

Condominium Rental Market 1,259 Projects 223,000 Units Estimated rental – 25% 56,000 $1,777 per month avg Purpose-Built Rental Apartments 307,000 Units 64% larger rents $1,777 per month avg 786 sf $2.26 psf 3,000 - 4,000 rental transactions on MLS per Quarter $1,086 per month avg 64% larger rents

Source: UrbanRental, Toronto Real Estate Board, CMHC

Approximately 14,000 Condo Rental Transactions through MLS in 2011, 7,500 in First Half of 2012

$2.18 $2.24 $2.21 $2.23 $2.26 $2.20 $2.25 $2.30 6,000 Figure 2 Condominium Rental Transactions and Index Rent by Quarter Toronto CMA : Q2-2011 to Q2-2012

4,500 transactions

3,750 4,378 2,902 2,984 4,439 $1.90 $1.95 $2.00 $2.05 $2.10 $2.15 2,000 4,000 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12

• 4,500 transactions

in Q2-12 - up 49% quarterly and 18% annually.

Demand for Condo Rental Units is Very Strong with 78% Lease-to-Listings Ratio, Not Translating into Big Increase in Index Rents

63.4% 79.4% 64.8% 66.3% 77.5% 60% 70% 80% 90% 6% 7% 8% Figure 3 Annual Index Rent Appreciation and Lease-to-Listings Ratio by Quarter Toronto CMA : Q2-2011 to Q2-2012 5.5% 6.9% 5.9% 5.9% 3.5% 0% 10% 20% 30% 40% 50% 60% 2% 3% 4% 5% 6% Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Annual Appreciation LLR

Annual Index Rent Growth is Typically Lower than Appreciation in New and Resale Markets

7.5% 8.1% 7.2%

7.0% 8.0% 9.0% Annual Index Price and Index Rent Growth in New, Resale & Rental Condominum Apartment Markets Toronto CMA : Q2-11, Q1-12 & Q2-12

7.2%

5.7% 3.7% 4.0%

5.5% 5.9% 3.5%

1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Q2-2011 Q1-2012 Q2-2012 New Resale Rental

Monthly Carrying Costs for Average New and Resale Condominiums Versus Average Condo Rents

– 20% Down, 1% Taxes, Average monthly maintenance, 3% Interest rate

$1,932 $1,900 $1,950 $2,000 Monthly Carrying Costs per Month for Average New & Resale Unit plus Average Condominium Rental Rates by Quarter Toronto CMA: 2011 to 2012 YTD

Q2-2012

New: 751 sf, $395,000,

$1,765 $1,865 $1,814 $1,686 $1,777 $1,600 $1,650 $1,700 $1,750 $1,800 $1,850 $1,900

• New

Resale Rental

$395,000, $0.49 psf Resale: 910 sf, $370,000, $0.58 psf Rental: 786 sf

Monthly Carrying Costs for Constant Sized New, Resale and Rental Condominiums

– 20% Down, 1% Taxes, Average monthly maintenance, 3% Interest rate Q2-2012 800 sf

New: $525 psf,

$1,825 $1,985 $1,900 $2,000 $2,100 Monthly Carring Costs per Month for an 800 sf New & Resale Unit plus Average Rent for 800 sf Condominium Apartment by Quarter Toronto CMA: 2011 to 2012 YTD

New: $525 psf, $420,000, $0.49 psf Resale: $407 psf, $326,000, $0.58 psf Rental: $2.26 psf

$1,825 $1,607 $1,699 $1,685 $1,808 $1,500 $1,600 $1,700 $1,800 $1,900

• New

Resale Rental

Plenty of Supply to Enter Rental Condominium Market over Next Two Years

• Approximately 50,000 completions scheduled for 2013

and 2014.

• Up to 50% of these suites could enter the rental pool, or

25,000 units. 25,000 units.

• This would represent a 45% increase in the condominium

rental market in the CMA – from 56,000 to 81,000.

• Can all these units be absorbed? If rents are not going up

significantly when in with short supply, what will occur with excess supply?

For information about Urbanation’s Condominium Market Survey, UrbanRental Report or our Consulting Services please contact:

Ben Myers 416-922-2200 ext.243 416-922-2200 ext.243 Ben@urbanation.ca

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