The Ontario government has lifted its ban on short-term rental. The government announced the opening short-term rental of cottages, condos and other sites as of June 5th, 2020. They will be permitted to resume as long as health and safety measures are put in place.
This announcement comes after the province shut down non-essential short-term rental operations due to COVID-19 back on April 4. Under Ontario’s Emergency Management and Civil Protection Act, short-term rentals — defined as 28 days or less — were only allowed to be rented to people in need of emergency housing.
The amendments now permit short-term rentals (any rental that is less than 28 consecutive days) across the city in principal residences. Within their principal residence, people can rent up to three rooms or their entire home.
Once the licence and registration system is ready, short-term rental companies will be required to obtain a licence and operators will be required to register with the City and pay the Municipal Accommodation Tax (MAT) of four percent.
The City is planning to implement the regulations for short-term rentals in phases. New online registration, licensing and enforcement systems are being put in place.
May traditionally marks the busiest month for real estate in Toronto… this year – not so much. Self-isolation, social distancing, and the overall uncertainty of the future reduced much of the activity we typically see in May. However, activity did start to pick up towards the end of the month!
April marked the first month of full lockdown, and really set the benchmark for comparison purposes. It’s important to distinguish market activity with pre and post COVID-19 numbers to get an accurate pulse of where the market is heading.
In May – sales, listings, active listings and prices posted much higher numbers than in April. Sales and new listings doubled (over 50%), month over month, and the average price increased to $863,000 (an increase of more than 5%). Speaking from my own experience, I also witnessed a huge uptick in emails, calls and showings on my listings.
Because context is important, now more than ever, it has to be said that May typically records the highest numbers of the year… but not so in 2020.
On a year-over-year (YOY) basis: sales were down by over 75% and new listings by 54%. We also saw a 68% increase in days properties sat on the market – a clear indication of a much cooler May. Prices did see a small gain of nearly 3% compared to May 2019, but still much less than the double-digit appreciation we saw in Q1 (January, February and March) of this year!
432 sales took place during the month of May
119 more homes than the previous month (38% increase in sales)
748 fewer homes than the previous year (63% decline in sales)
The average price of a detached home was $1,422,273
Up $172,543 compared to the previous month (13% increase in price)
Up $37,280 compared to the previous year (2.7% increase in price)
Semi Detached Houses
164 sales took place during the month of May
38 more homes than the previous month (30% increase in sales)
244 fewer homes than the previous year (59% decline in sales)
The average price of a Semi-Detached home was $1,143,322
Up $46,000 compared to the previous month (4% increase in price)
Up $92,790 compared to the previous year (8% increase)
164 sales took place during the month of May
56 more homes than the previous month (51% increase in sales)
202 fewer homes than the previous year (55% decline in sales)
The average price of a Town House was $794,626
Up $9,727 compared to the previous month (1% increase in price)
Down $1,463 compared to the previous year (0.18% decrease in price)
727 sales took place during the month of May
245 more sales than the previous month (50% increase in sales)
1,102 fewer condos than the previous year (58% decline in sales)
The average price of a Condo was $674,028
Up $61,728 compared to the previous month (10% increase in price)
Up $31,137 compared to the previous year (4% increase in price)
TRENDS TO WATCH
In April, the Government put a ban on short-term rental services (think AirBnB). As a result, we saw a lot more rental units come to market in the condo sector. With an oversupply of available units, we saw rent prices come down significantly. The government has lifted its short-term restriction, so we’ll see the impact this may have on the supply of condo rentals.
Canada Mortgage and Housing Corporation (CMHC) is in the process of announcing stricter lending criteria for anyone purchasing with less than 20% down. This could create a mini push for buyers into the market before the new rules take effect.
Bidding wars are back. I’ve seen several houses sell way over asking (and market value) in the last few weeks. Much of this can probably be attributed to the pent up demand from months prior – curious to see if this continues into the traditionally quieter summer months!