This one-bedroom apartment near Chinatown rented for $2,300, up 21% from last year. What it says about the Toronto rental market

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Price: $2,300

Neighborhood: farm park

X Factor: At 152 St. Patrick St., this one-bedroom, one-bathroom apartment is just steps from Grange Park, which is just south of the Art Gallery of Ontario. However, the popular public park and gallery are just the beginning of the area’s appeal.

The city’s bustling Chinatown is steps to the west, with Kensington Market within easy reach in around 10 minutes on foot. Just east of the apartment is the St. Patrick subway station, which connects commuters on the Yonge-University Line to the northern and southernmost points of the city.

Locally owned food from a wide range of cultural backgrounds, as well as cafes, bars and graffiti walls are defining features of this vibrant neighborhood, which has also been subject to much gentrification.

With rising costs, the rent for this apartment has also skyrocketed. We talk to our expert, estate agent Othneil Litchmoreto get a better understanding of the price.

Why did it come out at this price?

Although in 2021 unit 1105 was leased for $1,900 per month, it was listed for sale in July for $2,100 and leased just three days later for $2,300. The price increased a staggering $400, or 21 percent, in just one year.

“It’s the worst time” to rent, Litchmore said, adding that this year, market prices are up compared to last year, when “it was a struggle” for realtors to rent units.

This unit is rent controlled because it was occupied prior to 2018, which means that a tenant who lives here may only see their rent increase by a few percent in a year (a maximum of 1.2 percent at this time and 2.5 per cent starting next year) but landlords can raise rents by any amount between tenants thanks to Ontario’s vacancy decontrol rule.

If the unit had been rented at the list price, it would have increased 10.5 percent, but there is a growing trend for landlords to choose applicants who bid hundreds of dollars above the asking price.

While the apartment itself appears to be a decent size and in good condition, overall “it’s pretty average,” Litchmore said.

“In today’s market … I think the standards for renters are lower,” he said, adding that people looking to rent prioritize having a good location and a clean unit. “Everything else is negotiable.”

The house was rented by asking too much, but the final price actually puts it on par with the average one-bedroom unit on the market. South of Bloor Street, prices for units roughly the same size, between 500 and 599 square feet, have averaged $2,300 since July, Litchmore said.

The price increase barely exceeds the average price increase for Toronto, where one-bedroom apartments rent for 19.4 percent more than the same period last year, according to a recent report from a market research firm. .

But looking at other nearby apartments, Litchmore said the unit could have commanded an even higher price if it had been on the market longer.

Similar-sized apartments have been rented in the area for prices ranging from $2,200 to $2,550 since July, he explained.

“It is possible that he would have even gotten $2,400,” he said. “Because he was (rented) in three days.”

As demand in Toronto is expected to continue to rise, so will costs, say real estate experts, who predict at least another 15 percent increase in prices over the next six months.

The continued increase is the result of several factors. For one thing, homebuyers may have been pushed into the rental market by rising interest rates on homeownership and fewer available property listings, experts said.

Litchmore said the increased demand can also likely be attributed to more young professionals and students returning to the city after going to the suburbs with their parents during the pandemic shutdowns and lockdowns.

But homeowners have to “exercise restraint” when it comes to setting prices and accepting high offers, he said, acknowledging that those who do, however, are the exception.

With the market so competitive, renters may be offering a deal that will stretch their budget, which may ultimately not work out well for landlords.

“I think because so many people are so desperate for a place to rent, some people might overextend themselves,” Litchmore added.

Also, a landlord could benefit from choosing a tenant they believe will be responsible and respectful of the space rather than someone chosen simply because they made the highest offer, he said.

Any other tips for those looking at places like this?

“There’s a perception that real estate agents don’t add much value,” Litchmore said. “But in a tough market, he needs someone to stand up for him on his behalf and help sort all his ducks if he’s really trying to break into the downtown market in particular.”

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