Where are all the houses for sale? The Toronto real estate market in 2018 has been off to a slow start – it seems that inventory levels are very low, even for this time of year. There have been fewer than twenty new income properties (3 kitchens or more) hit the downtown MLS districts, and of those only two of them are under a million dollars.
That is a very low amount for pretty much the entirety of downtown Toronto. If this supply remains low, then expect prices to be driven up even further as the springtime demand kicks in. I am optimistic however that more income properties will hit the market as the weather gets nicer.
Happy Valentine’s Day everyone and I hope that all you sports fans enjoy the big game this Sunday.
Toronto’s New AirBnb Rule
Over the past few years many landlords have been offering short-term rentals due to the rise in popularity of services like Airbnb, HomeAway and VRBO. Airbnb, the largest of these services, is an American company which hosts an online marketplace and hospitality service, for people to lease or rent short-term lodging including vacation rentals, apartment rentals, homestays, hostel beds, or hotel rooms. The problem has been that the hospitality industry in Toronto is licensed and now hotels are competing with people renting out their homes for an evening or two.
This past December Toronto council adopted new short-term home rental rules that will ban homeowners from offering self-contained “secondary suites” on Airbnb.
The major point in council’s zoning amendments is a bylaw that establishes that only the ‘principal resident’ of a dwelling — house, apartment, townhouse, etc. - will be able to list that residence as a short-term rental. It is clear that the city wants to avoid people buying or renting residences, only to convert those residences into long-term Airbnb type hotels.
Short-term rental hosts will pay the city a $50 licensing fee and face a rental maximum of three rooms for an unlimited number of days, or a whole home for no more than 180 nights per year. Short-term booking agencies will each pay the city a $5,000 license fee and $1 a night per booking, and must have policies to deal with noisy, disruptive tenants.
It is estimated that Airbnb has over 10,000 Toronto hosts, about 10% of whom rent out secondary suites that will become illegal when regulations take effect on July 1st of this year. There are also several “executive” rental agencies, offering fully furnished suites, that will be affected as well. Toronto council hopes limiting such rentals to people’s principal residence will stamp out so-called “ghost hotels” where visitors come and go but there are few actual residents.
Alex Dagg, Airbnb’s policy director for Canada, said after the council vote: “This is truly a big step forward for the city of Toronto in terms of supporting the fact that we have thousands of families in Toronto who have been home-sharing and are now going to be formally recognized and regulated. We look forward to working with the city on the next steps.”
Sean Gadon, director of the city’s affordable housing office, warned council that allowing continued short-term rentals of self-contained suites with kitchens and bathrooms could see some long-term tenants evicted and possibly even forced into the city’s system of homeless shelters.
The city will review the new rules in 2019.
2017 Income Property Sales Statistics
The following chart shows all the TREB MLS sales from last year with at least three kitchens. It does not include properties with only 2 kitchens (duplexes and homes w basement apartments).
C01 - Downtown Toronto (south of Bloor)
C02 - Annex
E01 - Riverdale / Danforth
E02 - The Beaches
C08 - Cabbagetown
W01 - Roncesvalles
W02 - High Park / Junction