The fine folks at the Toronto Regional Real Estate Board have released their 2026 Q1 report on the rental market.  The report focuses on condominium rental units, both condo apartments as well as townhouses, in Toronto, York, Peel, Halton, Durham, Dufferin and Simcoe.

Here’s a link to the full report if you want to check it out.

As always, we reviewed the data to see what’s worth noting.  Let’s get into it!

More…but also less.

The report shows that across the TRREB boundaries (the GTA and a bit beyond) apartment rentals rose about 11% year-over-year, from 14,800 leases in Q1 2025 to 16,400 in Q1 2026. In the same periods, listings rose 6%, from 22,600 to 24,000, so supply remained heavy enough to preserve renter choice and negotiating power.

Put another way, more places were rented in this first quarter of 2026 than in the first quarter of 2025, but we also saw a somewhat smaller increase in the number of places for rent.  If you combine those two things – an increase in demand, with a smaller increase in supply – you’d naturally assume that rental prices would be going up.

Instead, rents fell across every apartment bedroom type, which is a bit of a head scratcher.  Average apartment rents were lower year-over-year for bachelors, one-bedrooms, two-bedrooms, and three-bedrooms. The biggest winner (for tenants) is the one-bedroom average rent, which fell 4.1% to $2,246 from $2,343. That’s about $100 less per month that landlords of these units are receiving in rent.

Two-bedrooms fell 3.2% to $2,939, and three-bedrooms fell 2.7% to $3,757, so it seems like the bigger, higher priced rental units did better than the smaller, cheaper places.  This is likely due to the level of supply, as while demand for family-size units has only increased over the last number of years, developers have focused on the smaller, single person or couple occupancy units.

Renting out a place?  You’re probably in Toronto.

Another interesting aspect of the report is that Toronto still dominated apartment leasing volume.  Out of 16,365 apartment leases across all TRREB areas, the City of Toronto accounted for 11,411, or roughly 70% of total apartment rental transactions. Toronto Central alone had 8,783 leases, making it the core of the rental market with more than half of rentals taking place there.

York Region had meaningful apartment volume, but at lower average rents than Toronto.  York Region had 1,908 apartment leases in Q1 2026. Its average one-bedroom rent was $2,165, compared with $2,322 in Toronto Central. Two-bedrooms averaged $2,732 in York Region, compared with $3,186 in Toronto Central.

While York is often the home of the highest average priced property in the GTA (trading places with Halton on some months), the average price for a condo unit in York is comparable to the average in Toronto, so while landlords in York are getting lower rent, they also paid less for their units.

Ready to rent?  Consider a townhouse.

The final odd aspect that we found in the report was in the rental townhouse portion of the market.  While the level of activity was pretty stable when compared year over year, the average rent dropped considerably.

When we compare Q1 of this year to Q1 of 2025, townhouse leases were nearly flat, rising 1.7% year-over-year from 1,156 to 1,176. In the same time comparison, average townhouse rents fell overall, with three-bedroom townhouse rents down 7.5% year-over-year. This is contrary to the condo apartment segment of the rental market, which as we mentioned, had larger three-bedroom units see the smallest average drop in rental prices of all the types of condo units.

Our take on this is that tenants who were renting out townhouses were most likely to have seen the comparable cost of owning a place equalize over the past year.  As purchase prices dropped in many segments of the markets across the GTA, a tenant who was already paying considerable money to rent a townhouse began to see prices that would carry for similar numbers to their current rent.  It seems that townhouse landlords had to make their rental rates more attractive to continue to appeal to tenants for their property who might otherwise look to jump into the property market themselves.

Every segment of the market – whether it is rental or for sale, condo or freehold, entry level or high end – has its own trends, rhythms and cycles.  If you’re thinking about buying or selling, renting or renting out, then you need to work with agents who understand the market you’re focused upon.  Get in touch with us to hear our thoughts on how to best move you forward!

Every couple of years we seem to see Toronto increasing their municipal land transfer tax (LTT) on luxury properties.  It happened back in 2024, when increased rates were imposed upon sales in Toronto of properties over $3M, and it’s just happened again.

As of April 1, 2026, we have new rates for the LTT on the sale of properties over $3M in Toronto.  The provincial land transfer tax has not made any similar changes at any point, but the city of Toronto is rapidly increasing the cost to buy within the Toronto boundaries.

We looked at the anticipated increased revenue the city would make when they did this back at the start of 2024, we said they’d bring in about $27M in additional revenue as a result of the increases.  That sounds like a pretty significant amount, but keep in mind that back in late 2023, the City of Toronto’s updated Long Term Financial Plan and staff report showed an estimated $1.5 billion starting pressure for the 2024 operating budget and $29.5 billion in capital needs, which both form part of a $46.5 billion shortfall over the next 10 years.  The forecasted $27M would have brought in less than 2% of the amount needed to address the operating budget shortfall.

Given the city remains in difficult financial circumstances, it is clear that the increased tax didn’t help in a material fashion.  The latest increase is actually going to be far less impactful, as it is mostly increases of around 1%  for those higher price bands.

Let’s look at the new changes and how much additional money it could bring in – plus how many deals need to be lost as buyers decide to purchase their high end homes outside of the city.

Apples to apples.

We’re primarily focused on resale properties in our team and the data we can access is largely limited to residential resale properties.  As such, all of our analyses below are based on that data.   We’re after some broad (but accurate) implications of the new LTT rates, but we aren’t considering:

• non-MLS transactions
• builder/direct new-home and new-condo closings
• commercial / industrial / multi-residential / vacant land transfers
• other taxable conveyances the City records but that do not show up in our records

While some of the specific numbers of the implications of the new LTT rates will be understated, our analysis does paint a clear picture of what it means to the resale market.  Now that we’re officially covered, let’s get into it.

First, a history lesson.

We’ve created a handy chart to show the recent history of the Toronto Land Transfer Tax.  The orange column is what it was for about six years, and the blue columns show the rate increase amount that was put into place as of January 1, 2024.  The green column is the brand new rate increase amounts that apply to properties bought in the city as of April 1, 2026.

There have been no changes made to the land transfer tax due on the purchase of any properties up to $3M, but if you’re at that level or higher, we saw it go from a flat rate of 2.5% on any amount above the $3M level, to a graduated system.  The higher the price point, the higher the rate you’re paying on that portion of your purchase.

The latest round of increases have added about 1% to most of the price bands, with a range from 0.9% to up to 1.1%.

It’s all marginal.

A reminder that the land transfer tax is a marginal tax bracket, which means that for any price above a threshold, you pay:

• The full tax from all lower brackets
• Plus the tax on the portion that falls inside the current bracket

For example, a $1.2 million purchase does not pay 2.0% on the full $1.2 million. Instead, it pays:

• 5% on the first $55,000 = $275
• 0% on the next $195,000 = $1,950
• 5% on the next $150,000 = $2,250
• 0% on the remaining $800,000 = $16,000
• Which would bring the total municipal land transfer tax to $20,475.

This is relevant as we look at what impact these higher tax brackets will have on the sales taking place moving forward.

The past ain’t the future.

A caveat we often give is that what happened in the past is not necessarily indicative of what will happen in the future.  That being said, we need to base our analysis on certain assumptions, so the big assumption in our analysis here is that we’ll see similar types of transactions and numbers of transactions in 2026 as we did in 2025.  Here’s how the 23,475 sales in the city of Toronto were spread across the various price bands.

A few things about the above data are very relevant to our review.

First, 97% of the sales that took place in Toronto in 2025 were under $3M, which means the change that just took place is utterly irrelevant to those sales.  The Toronto LTT rate for these properties has not changed since 2017 and they can go merrily about their business.

The next thing worth pointing out is that the 740 sales that were in the $3M plus price bands last year were mostly in the $3M to $5M range.  59% of the sales were in the $3M to $4M band and another 22% were in the $4M to $5M band, so over 80% of the sales were in that $3M to $5M range.

If we assume that 2026 will see a similar spread of deals as we saw in 2025, how are these higher land transfer tax rates in those price bands going to bring in to the city in increased revenue?

It’s more, but it’s not a lot more.

We pulled the average price for each of the price bands for the sales in 2025 and then calculated the Toronto LTT for each of those bands.  This is relying on averages within each price band so it will not be 100% accurate, but it is enough to give us an idea of what 2026 will look like for increased revenue with the new increased LTT rates.

The city would have brought in about $450M in municipal land transfer tax in 2025 based on these sales.  With the new higher rates for the higher end price points, that means an estimated revenue for 2026 of about $458M, which works out to about $8M more in land transfer tax revenue for the city.

As we see very few sales at the $5M or above price point, the bulk of this $8M comes from sales in the $3M to $5M range.

$8M is still better than a kick in the pants, right?

The final aspect of the new LTT tax rates worth discussing is the fact that our model makes the assumption that the same level of sales take place in Toronto despite increasing costs for those buyers.  While it may be unlikely that a lower price point buyer will choose to buy outside of the city to save on the land transfer tax, we have had clients who considered the difference in closing costs significant.

At the higher price points that this latest round of LTT rate increases impacts, the difference between what you pay in Toronto versus surrounding municipalities amounts to significant dollars.

For example, a $5 million buyer in Toronto would pay about $272K in total LTT, of which $112K is the provincial portion.  If the buyer chose to purchase instead in another city such as Oakville, they would save $160K on their closing costs.  That’s a significant amount of money and while the latest increase in Toronto’s LTT rates doesn’t materially change the amount they pay, it is reaching levels that could result in some buyers deciding they’d rather put that money into a home purchase outside of Toronto.

While it is complicated to project how many lost deals it would take for the city to not see that projected $8M increased LTT from high end sales, we know that any purchase that moves outside of the city loses the entirety of the MLTT, not just the portion at the higher end.  Our calculation is that it would take about 67 of these high end deals leaving the city for that projected $8M in extra LTT revenue to disappear completely.

We regularly work with buyers and sellers impacted by decisions like this latest Toronto LTT rate increases, and it’s important that your agent understands the factors that influence the high end and luxury market in the city.  If you’re looking to buy or sell in the $3M plus range and want agents that understand how that segment actually works, get in touch!

It’s pretty well known that real estate agents are somewhat prone to hyperbole.  We’ve written in the past about the secret codewords that agents use to try to convince buyers a home is appealing.

While people are pretty good at seeing past the flowery phrases dressing up the listing, it can be much harder to decipher the differences between two seemingly similar properties.  After all, numbers don’t lie, right?

So, numbers can lie.

Real estate is full of numbers and while the price is arguably the most important one, lots of the other numbers aren’t always what they seem.  Consider the following examples:

• Two 4-bedroom homes, where one has three good-sized bedrooms on the 2^nd floor and a spare bedroom (or den) on the ground floor. Suitable for a family with young kids, closets in all the rooms and able to fit beds, dressers and so forth.  The other property has one huge bedroom on the 2^nd floor, with massive walk in closets and a spa bathroom retreat and three smallish “bedrooms” in the basement, one of which has no windows.  Great for a couple with no kids who want hobby rooms in the basement.
• Two 785 sf condo units, each with two bedrooms and two washrooms. The first is a rectangular shaped split wing layout with two 10×12 bedrooms at either end of the condo, with ensuite washrooms off both, one of which opens to the hallway so guests can access it without going through a bedroom.  The other is a small L shape, with a full bathroom right beside the entrance door, a hallway leading down to a small bedroom with an angled wall, and a primary suite beside it with the washroom took into the other side of the angled wall.

Two properties can appear nearly identical on paper if you look at just the numbers, but there are often considerable differences between them when you look closer.

According to Webster’s Dictionary…

Numbers aren’t the only area where seemingly identical properties can differ significantly.  We have some standards that apply to how real estate agents can describe different attributes, but they aren’t always followed to the letter.  Some agents consider a kitchen “newly” renovated if it happened in the last five years, whereas others follow the more stringent approach of it literally just got renovated before we listed the home for sale.

While flat out misrepresentation is relatively rare, people can hold very different definitions of what certain descriptions mean.  Where do you fall on the below scales?

• Is a walk-in closet a large room with a dressing bench in the middle and custom shelving on all sides, or is a walk in closet any closet that has enough space for you to walk inside and cuddle your clothes?
• Is a family size kitchen a big room with tons of cabinetry, an extended island with spots for stools, as well as a separate eating area with a kitchen table? Or is it a narrow galley style that has a bistro table and two small chairs at the end beside the dishwasher?
• Are high-end appliances delivered from Europe and installed by a team of four who wear white booties when they enter your home, or are they a mismatched group of premium versions of different appliance brands that you see in most homes?
• Is the only hardwood that can be called hardwood flooring actual hardwood such as oak, hickory or maple, or is engineered hardwood with a thin layer of hardwood veneer also hardwood flooring?

We could go on and on, but when no specific details are provided on any claimed “feature” of a home, it is likely there are big differences between two listings who both claim they have it.

Where did I put my glasses?

Finally, there are homes that seem to have identical features as per the listing, but it turns out that not all things are created equal.  Which would you prefer?

• If you’re invited to enjoy your private backyard oasis with a pool and hot tub, do you envision an inground pool, with a hot tub section you can swim into from the pool? What if it is an aboveground pool with a hot tub in a different section of the backyard?
• Is it a media room if there are couches (that don’t come with the house) and a first generation low resolution digital projector (that is generously being included), or is a media room a custom built space with built-in furniture, sound baffling and a state of the art video and audio system?
• If both properties have a balcony, does it make a difference if one faces the Gardiner and is loud and dusty all year round, whereas the other faces the lake and views of the setting sun?

The above examples may seem pretty far fetched but trust us, they have all happened.  The quality, age and inclusions in a given attribute can make a huge difference in the value – or lack thereof – to potential buyers.

We’ve looked at a lot of properties for our clients and with our clients.  If we had to estimate the numbers, it would be somewhere between “too many” and a bazillion.  As a result, we’re very good at spotting differences that the numbers and images may not make clear to the general public.

This is surprisingly relevant on the sale side work we do, as a big part of setting your list price is comparing your home against other properties.  We often encounter situations where we see significant differences between our seller’s home and the recently sold and currently on the market competition.  This allows us to make sure we don’t leave money on the table, or mistakenly over price and not get the result our clients need.

If you’re looking to make a move and want to work with agents who know what to look for when comparing properties, get in touch with us!

Back in April 2022, the City of Toronto saw our average price hit what remains an all-time high of $1.249M.  Flash forward to January 2026 and our average price in the city is now $966,000.  That’s a drop of $284,000 in average property values in the city since that time.

Make no mistake, real estate prices in Toronto and most of the GTA grew so much over the past twenty years that affordability became a tremendous issue.  A drop – even a substantial drop of over a quarter million dollars – is not necessarily enough to make housing affordable for most people.

There is a prevalent way of thinking in the GTA when it comes to real estate, which is that whatever is happening now, will continue to happen forever.  If prices are rising, speculators buy up real estate because prices will always rise.  If prices are dropping, only a fool would buy real estate as it will be worth less in the coming months and years.

The truth is that real estate markets do shift, and we’ve certainly seen that shift happen in the past five years in GTA.  Despite the recent proof that was is currently happening doesn’t keep happening forever, we’re seeing many would be buyers hold off on making a purchasing decision out of fear that the asset they buy will lose value after they own it.

Housing is a spectrum, with different types and different price points, and at the bottom of the ladder is the much-maligned condominium.  It is the most affordable option for anyone looking to get into the housing market and it makes up more than half of the housing stock in Toronto, and about a quarter in most other parts of the GTA.  While some purchasers of condo units are moving from one condo to another, it is more likely to be a renter who is able to make the move to home owner.

Is the math still mathing?

We thought it was worth examining the current math around buying versus renting to see if now is the time for people to get off the sidelines.  It’s always better to talk about specific properties than the market in general, so let’s get into the math on a specific building.

50 Eglinton Avenue West is a condo building that went up in 1992 and has just over 200 units, ranging in size from 549 sf to 1,500 sf.

A one-bedroom unit in the building leased for $2,000 recently.  A very similar unit sold for $390,000 this month, so we have a great opportunity to run the numbers and compare the costs.

Below is the chart for the monthly costs for owning the unit.

As you can see, the cost for the mortgage on a monthly basis is pretty much equal to the cost to rent it.  The $1,989 monthly mortgage cost is based on a good current (as of February 6, 2026) mortgage rate of 4.74% for a five-year fixed term with a 25-year amortization schedule.  We’ve assumed a 10% downpayment of about $39,000, so a mortgage of just over $350,000.

The total monthly costs of about $2,800 include the maintenance fees of about $640 and a monthly contribution of about $190 to the annual property tax bill.  Where the math becomes interesting is if you take the principal component of the $2,000 mortgage payment into account.  As of the first mortgage payment, the principal being paid down is $768 a month, which equals 38% of the monthly mortgage cost.  That number goes up each month and can be viewed as sort of forced savings account that the homeowner is putting money into each month.

If you do the simple math that incorporates that principal repayment, we’re not far off from an effective monthly cost to own of about $2,000, which happens to be the same amount it costs to rent.  While not all purchase versus rent calculations will return such a relatively even result, it is a striking example of how the decision to buy, or rent can be about more than the monthly costs.

If it costs the same, why wouldn’t you own?

There are obvious reasons why all renters are not suddenly snapping up condos.

In order to qualify for a mortgage, they need to have stable income of a sufficient amount and of course they need to have a downpayment saved up for the purchase.  Whether that downpayment is 5%, 10%, 20% or even more, it is a challenge for many renters to save up enough for a purchase.

In addition to qualifying for a mortgage, some renters have plans for their future that make buying a property unappealing.  There are significant transaction costs associated with buying and selling real estate, with land transfer tax on the buy side and real estate commissions on the sale side.  If your future involves a change in geography, then renting is in fact the best option.

We’ve already discussed the biggest reason renters aren’t jumping into the housing market, which is fear about what is coming next.  Even if you have the income to qualify for a place, the downpayment has been saved up and your plans are set for the next number of years, no one wants to buy an asset that is going to decrease in value.

If we’re clear on why lots of renters are not taking the plunge right now into home ownership – even if the math shows that it can be more or less the same to carry on a monthly basis – the question becomes why is buying now a good idea?

Security and appreciation?  Sounds good.

We use the term “housing insecurity” in the real estate industry to describe the uncertainty of being a tenant rather than a landlord.  With some rare exceptions, tenants are mostly at the mercy of their landlord as to whether they can stay in the home they are renting.  While there are protections in place to prevent unscrupulous evictions, it is fundamentally true that landlords hold the power of whether a tenant stays or goes.

When you own a home, you get to decide your future – as long as you’re paying your mortgage that is!  Being in control of that fundamental decision of your housing is hugely impactful on your peace of mind as to what comes next in your life.

The opposite side of the fear of the market going down after you buy, is the hope that the market will rise after your purchase.  While we have seen average prices drop recently, the long-term averages for real estate values have always shown growth.  If you are able to buy in a market where prices are lower and you can hold onto the property until you sell in a market where prices have grown, you benefit from that market appreciation.

If you’re considering making the move from tenant to homeowner, we’ve helped a number of our clients make that leap.  We’re bullish about the opportunity for appreciation over the next five years and if you’re keen to be a homeowner and benefit from a rising market, get in touch with us to discuss next steps!

If you read the newspaper headlines and follow real estate news on your feed, you may have the impression that now is a terrible time to own a condo.  That perception is driven by the fact that many investors as well as would-be investors have decided to realize their profits (or cut their losses) and put their condo up for sale.

It’s hard to argue against the idea that is a bad time to sell a condo, as over supply – particularly of the one bedroom or studio apartment type – has put downward pressure on condo prices for most of the last couple of years.

While we’d agree it is a challenging time to sell condo apartments, that doesn’t necessarily mean that it is a bad time to own a condo unit.  Condo apartments make up 65% of the housing stock in Toronto, and given Toronto has a population of around 3.2 million people, there over two million people who own condos in the city.  With our population density and price of real estate, condo units have been (and remain) the lowest priced way to get onto the property ladder in Toronto.  Yes, condo prices have dropped in the past couple of years, but that is also true for the market as a whole.

In May, 2024, we saw the average price for a condo unit in Toronto hit its two year high, coming in at about $776,000.  Over the course of a bit more than a year, we saw it drop down to a two year low of $673,000.  As of the start of December 2025, our average price for a condo is now $698,000.  As of right now, we’re up $25,000 from our two year low, and down $77,000 from our two year high.

For the market as a whole, the highest average sale price in the past two years in Toronto was also in May 2024, when we hit an average sale price of approximately $1,199,000.  Compare that against January 2024, where Toronto saw our lowest average sale price of about $952,000.  That means that in the past couple of years we’ve seen prices for the market as a whole fluctuate by about $247,000.

Our current average price of $1,060,000 means that we’re up $108,000 from our two year low, and down $139,000 from our two year high.

The numbers show that owning a condo right now is better than it has been in the worst of our recent market shifts (to the tune of about $25K), so we’d say condo owners are doing OK.

If it is a bad time to sell a condo, an OK time to own a condo, what sort of timing is it for buying one?  With a couple of caveats, we think right now (December 2025) is a great time to buy a condo.  Here’s our reasoning.

Desperate times call for…taking what you can get.

While seasonal cycles may be less reliable in our real estate market in the past number of years, we still encounter a winter slow down every year.  In 2023, 2024 and 2025, October was the last hurrah in terms of number of sales for the remainder of the year.  We always see fewer sales, lower prices and less new listings as we head towards the end of the year.

Sellers who have been trying to get rid of a condo unit for weeks or months view the upcoming winter months with dread.  They know that showings will slow to a trickle and carrying costs will continue to mount.  If it is an investment property that has been vacant for more than six months this year, then they are also likely facing a 3% vacancy tax from the City of Toronto.

Put bluntly, the end of the year (and the first month of a new year) are excellent opportunities for buyers.  If you can close quickly, your agent can put lots of pressure on a seller to have them accept a much lower offer than they would have even considered a few months ago.

Renting isn’t looking so hot right now.

When getting a good sale price is hard to do, condo owners who aren’t in need of the capital in the property can choose to rent it out.  This has traditionally been the lifeline for those condo owners who aren’t able to get the price they want or need in order to move forward with a sale.

The challenge with that approach right now is two-fold.  First, winter is not just a slow time to sell properties – it is also a difficult time to rent a place.  Whether it is the holidays, the logistical challenges of physically moving in cold, snowy weather or the short days, winter is the hardest season to rent a property.

The second challenge has to do with the state of our condo rental market, which has dropped noticeably for condo landlords.  Asking rents in Toronto are down 2.9% year-over-year to an average of $2,592 and the City of Toronto’s secondary condo rents fell 3.8% year-over-year in Q3 2025 (to about $2,714 for a 675-sf unit).  As stories of the condo market troubles proliferated, a number of potential sellers of condo units decided to keep them and rent them out.  As a result, competition has intensified as supply has grown and tenants have more choice.

On the new purpose-built rental side of the equation, professional rental companies have begun offering incentives such as a free month rent or parking to attract tenants.  This has further impacted the resale rental condo market, which is typically older than the purpose-built rentals.

If we combine all of the above, it means that the rental option is not that desirable for a number of condo sellers.  This is in addition to the fact that some condo owners urgently need the capital in the property due to financial issues and cannot afford to keep the unit even if they can rent it out.

The future’s so bright, I’ve got to wear shades.

We have a bad habit in Toronto where we assume that whatever is happening to real estate will continue to happen forever.  If prices are going up, then they will always go up.  If properties aren’t appreciating, then they will be worth the same in five years as right now.  Given the price drops we’ve seen over the past couple of years, most of Toronto seems to be falling into the “whatever it’s worth now, it will be worth less later” trap.

The reality is that real estate markets fluctuate and that the trend for prices move right along with it.

Take a look at the below chart which shows the average price for a property in Toronto over the past two years.  This includes both freehold as well as condo units, but the same fluctuations occur in the condo segment.  Prices go up and down on a month to month basis and while the average always creeps higher over time, we have seen periods of two to four years of lack of growth before prices increase.

While prices may fluctuate, when the perception is that prices are going to go down, buyers hold off on making a purchase.  When that perception continues and economic issues can further uncertainty, we end up with a situation where the number of buyers is greatly exceeded by the number of sellers.  This has arguably been felt across the entire Toronto real estate market, but it has most strongly impacted the condo segment.

As a result of this perception, we started seeing a slow down in 2022 of the sales of new condo projects.  They began to decline in mid-2022 and by the following year, that slow down had worsened.   Urbanation reports that 2023 condo construction starts fell 45% in 2023 compared to 2022, and the second half of 2023 was down 72% year-over-year, meaning far fewer projects actually broke ground.  By 2024, the slowdown became severe and Urbanation reported that condo apartment construction starts dropped 50% to a 25-year low.   CMHC says 2024 condo-unit cancellations in Toronto were more than five times the number in a typical year (such as 2022) and Urbanation’s latest survey counts 32 condo projects cancelled since the start of 2024 plus 20 more that are on hold or in receivership.

Things have not improved in 2025, and the new-build condo market has posted multi-decade lows, with the lowest sales since 1995, with only 2,176 units sold year-to-date, which is a 28-year low.  Cancellations set a new record this year, with 18 projects (about 4,040 units) having been cancelled completely.

It takes three to four years for a condo project to go from ground-breaking to occupancy, which means that our 2023 slow down will result in 2026/2027 seeing very few new condo projects hitting the market.  Over the course of the next couple of years, we’re predicting that the current state of the condo market will reverse, with fewer condo units available for sale as the lack of new inventory means older resale inventory is basically the only option for condo buyers.

If we’re conservative, we would say that 2027 or 2028 is when resale condo prices will begin rising.  As buyer sentiment shifts based on the scarcity of available units, new construction projects will begin selling out again, which means by 2030 or later, new condo projects will be coming onto the market and prices will steady out.

In the very short-term (December 2025, January and February 2026), there are great opportunities to buy a resale condo from a seller who has experienced few showings and little interest.  Throughout the course of 2026, further opportunities will become available, driven by economic news and the strength (or weakness) of our economy.  In 2027, the lack of new condo projects coming on the market will start to shift buyer sentiment and bargains will disappear.

If you’re thinking about buying a condo and have a three to five year timeframe of holding it, then we’d love to help you get a great bargain – or two!  If that sounds good, please reach out to us so we can show you specific opportunities we’re seeing out there!

While we generally deal with clients looking to buy, sell or rent out homes, we’re also licensed to help with the other types of listings that show up on the Toronto Regional Real Estate Board’s multiple listing service (MLS).  This can mean businesses for sale, vacant land and also, believe it or not, parking spaces.

When we search for parking spaces currently for sale on MLS, we see there are 128 spots for sale.  They range from $2,000 to $200,000 but the median price is about $42,000.

They are mostly in Toronto, but we have a couple up in Innisfil, three in Mississauga, one in Oakville and one out in Kitchener.  Here’s the map result of our search.

What’s a parking spot cost these days?

The lowest price option at $2,000 is in fact a bicycle parking spot in a condo building in the Mimico neighbourhood of Toronto.  Yes, owned bicycle parking spots are a thing in Toronto and yes, the going rate is apparently a couple of grand.

The highest price option of $200,000 is actually two parking spots in a condo building steps from the Rogers Centre in downtown Toronto.  If we do some complicated math, that means each is for sale for $100K, and that actually isn’t the most expensive option if you’re in the market for a parking spot.

The highest price single parking spot for sale as of today is located in a condo building in the Waterfront area of Toronto, asking $130,005.  It was originally $145,000 but it didn’t sell so they lowered the price by about $15K.  We’re not sure exactly why the extra five bucks is on the list price, but possibly it is to allow some negotiating space and still sell for $130K.  We’d share a picture of this beauty, but there is just a shot of the outside of the building, 505 Richmond Street West, so only serious buyers get to see what $130,005 buys you.

As with most parking spaces for sale, there is a caveat.  Almost all condo corporations have rules about parking spaces having to be owned by a resident of the building itself.  This means, if you own a condo unit in the building and you want to also own a parking spot, you’re good to go.  If, however, you work nearby and think buying a parking space makes sense for your commute, you’re out of luck.

How much does a parking spot add in actual value?

This is a tougher question to answer as we rarely see two identical units where one has parking and the other doesn’t.  Other factors often influence the sale price and it can be tough to get to a specific value for a parking spot.

Let’s look at our luxury parking spot to see if we can see if the list price of just over $130K is worth it.  If you are interested in this parking spot, and you live at 505 Richmond Street West, you’ll probably be aware that the median price of a unit in the building in the last year has been around $870,000.  That would mean this parking space is for sale at about 15% of the cost of purchasing an actual unit.

Only four of those twelve sales from the past year had a parking space, so let’s get a bit more granular so we’re sure we’re not being unfair.

The four properties that sold that had parking had an average price of about $1.5M, whereas the eight that sold that didn’t have parking had an average price of about $785,000.  Clearly, parking in the building typically goes with the larger, premium units.

The only smaller unit that sold in the last year that had a parking spot sold for $895,000 and a similar size unit that sold in a similar time frame – without a parking spot – went for $845,000.  That puts the current value for a parking spot in the building at about $50K, but perhaps there are other factors we’re not considering.

What could I buy instead of a parking spot?

If you’re willing to go a fair distance further than downtown Toronto, you can get more than a parking space for your $130K budget.  If Kirkland Lake, Frontenac, near Grand Bend or a bit south of Ottawa appeal, then you’ve got a few options.  As well, if you’re interested in fractional ownership, where you get to spend some time (typically between three to six weeks of the year) in a place, that same budget would get you a ton of nice options.

For the sake of fairness, let’s look at properties for sale where you get to spend a significant part of the year (at least six months), that are relatively close to the mecca of parking spaces for sale (that would be Toronto) and we’ll see what your options are for around the same price.

Head North East to Trailer Park Living in Kawartha Lakes

Option #1 is for sale at $120,000 and is a mobile home/trailer located in the Cedar Valley Trailer Park.  It’s a three bedroom, one washroom home on leased land close to Scugog River and Sturgeon Lake.  The park is only open from May to October, so the parking spot wins in the ability to use it all year round.  It would likely be hard to have a BBQ in your parking spot though, so it’s all about trade-offs.

ALL PICTURES ARE THE PROPERTY OF ROYAL LEPAGE KAWARTHA LAKES REALTY INC.

Go North to Cottage Country in Gravenhurst

Option #2 is for sale at $128,150, which means you’d have a cool $1,855 left over if you opted for it as opposed to the parking spot.  It is a detached bungalow with three bedrooms and one washroom, located on leased land in the Lantern Bay Resort.  The resort is also open just seasonally from May to October, so not a true comparison to the all year round parking spot lifestyle.

ALL PICTURES ARE THE PROPERTY OF Century 21 B.J. Roth Realty Ltd.

Head West until you hit the Nudist Resort in Hamilton

Option #3 is for sale at $109,900 and comes with the added bonus of saving on the cost of outfits, as it is located in the Ponderosa Nature Nudist Resort in the Flamborough area just NW of Hamilton.  This chalet style detached home has just one bedroom, a two piece bathroom inside and apparently an outdoor heated shower.  The chalet is all open concept with a second bunkie where the bedroom is located.  While it is on leased land like our other two options, the park appears to be open all year round.  If you’re a practicing nudist, then this place definitely beats the parking spot!

ALL PICTURES ARE THE PROPERTY OF ROYAL LEPAGE BRANT REALTY.

While there are lots of other options in this price point if you’re interested in going further afield or a more fractional ownership model, we thought you’d enjoy seeing these three options.

While we don’t tend to do much business in parking spots (or nudist resorts), we definitely have helped clients with more atypical purchases and sales over the years.  Whether it is commercial real estate, the sale of a business, the sale of land lease properties or vacant land, we’re here to help.  If you want to talk about how we can move you forward, please don’t hesitate to get in touch with us to discuss next steps.

Something can be true and also mostly irrelevant.

Consider the recent headlines about mortgage defaults increasing in Ontario in the last part of 2024.

• Ontario sees another enormous jump in people not paying housing and other bills
• Ontario mortgage defaults surge as higher payments take a toll
• Mortgage defaults climb in Ontario as homeowners face renewal at higher rates

The wording used is pretty clear.  There has been an “enormous” increase and we’re seeing defaults “surge” as more and more people struggle with making their mortgage payments.  These are tough times and it seems like most of your neighbours will soon be on the street.

The first article linked above is from blogTO and in it, we have this alarming statistic.  “When looking at the fourth quarter of the year versus the same time in 2023, there was a shocking 90.2 per cent increase in the number of Ontarians who hadn’t made a mortgage payment in 90 days or more, with over 11,000 households having missed at least one payment.”

Seeing a 90% increase in people who are not making their mortgage payments is absolutely a huge change, however, the actual stats about homeowners who missed payments for at least 90 days – the data that Equifax Canada recently released and that sparked these headlines – looks like this:

• Q4 2023 – 0.12% of total mortgages
• Q3 2024 – 0.19% of total mortgages
• Q4 2024 – 0.22% of total mortgages

Did the number of people not making their mortgage payments almost double in the last part of 2024 compared to the same time in 2023?  Absolutely.  Is it a lot of people?  Nope.

In Toronto, for example, we have a population of around 3.02 million people and the home ownership rate is around 65%.  Some of those people won’t have mortgages, but let’s do the worst case scenario and say everyone who owns a home does have a mortgage and 0.22% of them haven’t made payments in the last 90 days of 2024.  That means that about 24,000 of the 1,967,000 mortgages are having trouble making payments.

While that is still a significant number of homeowners facing financial struggles, it remains a very tiny portion of homeowners in Ontario.

We’re real estate agents, not mortgage brokers or lenders, but these headlines did get us thinking about how there are often incorrect inferences made from accurate data about the real estate market.  We decided to take a hot topic these days – the level of condo units coming on the market – and take you behind the scenes.  Let’s get into it.

The Mother of All Charts

The good folks at the Toronto Regional Real Estate Board, in partnership with PropTx and Habistat, have started producing some very interesting charts.  Take a look at the below chart, because we’re going to use this single chart to show you exactly what is happening in the condo market.

Here’s what we see when we look at this chart.

So, there’s 431 more condo units for sale in Toronto.  Big deal.

If we look at the two blue bars in the chart, we see that as of the end of December, 2024, there were 3,778 condo apartments for sale in Toronto, and that a month later, there were 4,209 units for sale.  That’s 431 more condo units, but that’s hardly news, right?

We’d agree with you, particularly because December is typically the slowest month of the year, both for sales as well as new listings.  The fact that we have more active listings in January is pretty typical and going up by a bit over 10% isn’t particularly unusual.

Let’s look deeper.

Wait, almost 3,000 new condo listings hit the market?!

The green bar represents the number of new condo unit listings in January in Toronto and we saw 2,904 new listings hit the market.  That number equals 77% of the total active listings at the start of the month, so we’re seeing a huge increase in more condo units for sale!  Prices will collapse, sellers will pound the table in frustration and dogs will cower in the corner.

Wait a minute, we had about 3,800 active listings at the start of January and then we had about 2,900 new listings during the month, so how did we end the month with just over 4,200 active listings?  Where’d they all go?

Why sell when you can terminate?

The four red bars in the chart represent listings that went off the market.

The first, smallest one is suspensions, with 159 condo listings suspended during the month.  Real estate agents are supposed to suspend a listing when a seller wants to be off the market temporarily but will be returning to being actively listed for sale soon.  We say “supposed to”, as we’ve seen suspended listings from years ago, so some agents just suspend a listing and it remains sort of on the market.  Call it Schrodinger’s condo.

The second smallest red bar is expirations, with 434 condo listings expiring in January, 2025.  All listings have a listing term, where the agent is given permission to list the property for sale and when the listing period ends, the system automatically marks the listing as expired.  It won’t show up on searches anymore as from the perspective of TRREB, there is no longer permission to try to sell that property.

The third red bar over is transactions, which is condo units that actually sold in January.  We saw 771 condo units sell in the city in January and if that strikes you as not a great number, you’re right.  We started with about 3,800 active listings, then we had 2,900 more listings hit the market, and in a full month, only 771 of those properties sold.  That works out to about 12% of the total available units over the course of the month, or 20% of the units that were on the market at the start of the month.  Ouch.

Our final, and largest, red bar is terminations.  When a seller decides to no longer sell their property, they sign paperwork to terminate the listing.  It’s not sold, it’s not suspended, it’s not expired – it’s just cancelled.  We had 1,109 condo units terminated in January and it’s unknown what happened with those listings.  We certainly suspect that a significant number of them were relisted at a lower price and showed up as part of the 2,900 “new” listings that hit the market in January.  As TRREB allows listings to be terminated and relisted immediately, it certainly muddies the waters.

Pick a stat, any stat.

The beauty of this chart is that it shows very clearly what happens when you rely on any one stat about the market as an indicator of what is happening.

• If you compare the number of active condo listings from December, 2024 to January, 2025, it looks like a pretty reasonable increase in active listings as the new year gets started.
• If you look at the number of new condo listings that came on the market in January, you’d think we’re seeing a massive increase in options for buyers and prices should drop.
• If you look at the suspensions, expirations, and terminations of condo listings in January, you see that there was a ton of activity around unsuccessful listings and it seems like a very messy month to be trying to sell a condo in the city.
• Finally, if you look at the number of actual transactions (sold condo units), you’d see that it’s the third lowest number in the chart. We saw four times as many new listings as we did sales and 44% more terminations than actual sales.

We absolutely love the data that’s in this chart, as it shows a completely different story than what you would see if you focused on just one of the stats.

If you’re thinking about buying or selling, you need real estate agents that don’t rely on headlines or use one stat as an indication of what’s happening in your specific market.  Anyone who takes that approach will cost you money, either by having you overpay when you buy, or by leaving money on the table when you sell.  If you’d rather get the best results on your purchase or sale, then get in touch with us!

Whenever there are headlines about real estate in the media, it is often unclear what market results they are sharing, or for what type of real estate the forecasts are focused upon.  Sometimes the headline is about what happened to the average price across Canada in the past year, sometimes a forecast is about what’s coming next in Toronto – and sometimes it isn’t about any market or housing type in particular.

In early February 2025, we attended a Year in Review event put on by the good people at the Toronto Regional Real Estate Board.  As you can imagine, lots of stats were discussed, forecasts were made and coffee was consumed.

We wanted to breakdown one particular segment of the stats across the GTA, namely housing type.  The headlines we reference above are often focused on what’s happening, on average, in a given housing market.  It is rare that these stories talk about what is happening with certain housing types, and make no mistake, there are significant differences in how certain types of homes did and what’s predicted to happen next.

Grab a cup of coffee and sit down as we walk you through what happened in 2024 for your housing type!

First off, what sort of places do people live in?

One thing that surprises many people is the actual percentages of housing types that make up a given market.  We tend to make assumptions about the levels of housing types based on what we see in the neighbours in which we live and work, but the percentages for the area can be quite different.

Here’s the breakdown of percentages for each housing type in the seven areas of the GTA.

With the exception of Toronto, the most common housing type across the GTA is detached homes, followed by apartments.  Toronto swaps the order of those two, but they remain the two most common housing types.  Semi-detached homes and townhouses each make up only 5% to 12% of housing market across the GTA, so they are far less common than you might think.

We’re going to look at prices and sales across the GTA next, so we need to know how much each housing type make up for the GTA on average.  Here are the numbers.

• Detached Houses: Approximately 45.5%
• Semi-Detached Houses: Approximately 8.5%
• Townhouses (Row Houses): Approximately 9.5%
• Apartments: Approximately 36.5%

In a pie chart, that looks like this.

Now that we know the breakdown of housing types in each part of the GTA and the GTA as a whole, let’s look at what happened in 2024!

We did it!  We had (slightly) more sales in 2024!

Last year, we saw a slight increase in the level of homes sold, going up from about 65,900 in 2023 to about 67,600 in 2024.  That’s about 1,700 more sales across the entirety of the GTA, so not exactly a huge difference.

As you can see from the line chart of sales per month, April was the busiest month last year and December came in as the slowest month of the year.

Those sales were spread across the GTA, but not evenly of course.  Toronto saw the largest level of sales, while York and Peel more or less tied for second place.  Durham and Halton each had a pretty significant level of sales but Simcoe was down near the bottom, and Dufferin was the least active market last year in terms of sales.

If we look at the types of homes that sold, we can see that almost half (46%) of homes sold last year were detached homes.  That matches exactly the percentage of homes (46%) that detached homes make up of the housing mix.  Apartments accounted for 28% of the sales last year, despite making up 36% of the housing mix, which means it was a slower year for apartment transactions.  Townhouses made up 18% of the transactions in 2024, despite being just 10% of the housing mix, so it seems like people who were going to buy apartments opted for townhouses instead.  Finally, semi-detached properties were 9% of the sales in 2024, and that’s exactly the percentage of the housing mix they have in the GTA.

Put it all together, and it seems like the sales of detached and semi-detached did what we would expect given the housing mix, but apartments and townhouses decided to switch places in 2024.

We did it!  We had (marginally) more affordable prices in 2024!

On the average price side of the equation, we saw that we saw a slight drop in the average price across the GTA.  It went from about $1.126M in 2023 down to about $1.117M in 2025.  That’s about $9,000, so we’ll hold off on the ticker tape parade for now.

The highest average price of the year was in May of 2024, while the start of the year was the lowest.

Turning to the average price by home type, we see that detached homes lead the market, with an average price of $1.453M in the GTA.  That’s down about $10K from 2023.  Despite not making up much of the sales overall, semi-detached are the second highest price option, at $1.102M.  That’s down about $12K from the year before.  Townhouses saw the biggest actual price drop, going from $949K in 2023 to about $922K on average in 2024, a drop of about $27,000.  This might account for the increase in townhouse sales relative to their percentage of the housing mix, as buyers saw an opportunity.  Apartments dropped about $14K, going from $717K on average in 2023 to about $703K last year.

While no housing type showed an improvement in average price across the GTA in 2024 compared to 2023, it’s far from the housing crash that some pundits predicted would happen.

Let’s call 2024 the year of (trying to) selling your home.

Finally, if we look at the breakdown of new listings, we can see that we had a substantial increase in the level of properties going up for sale in 2024 compared to 2023. We had just over 166,000 listings come on the market last year and that is about 16% more than in 2023.  That’s over 23,000 more new listings compared to 2023.

A reminder that we had 67,609 sales in 2024, which means that only about 41% of the new listings in 2024 actually sold.  Even if some of those “new” listings were re-listings of properties that failed to sell, there were lots of sellers who wanted to find a buyer but didn’t manage to do so.

The percentages when it came to who was trying to sell last year are broadly in keeping with the housing mix percentages we see in the GTA, but townhouses were again a larger part of the mix than would be expected.  They also were the biggest year over year increase in terms of how much of the market inventory they comprised, up 122% compared to the level in 2023.

From a simple numbers perspective, we had the most disappointed sellers in the condo apartment category, with about 9,000 more attempts to sell in 2024 than in 2023.

There you have it, 2024 in review!  It wasn’t a banner year by pretty much any standard, but the review does tell us that where you live and the housing type you own makes a significant difference in how your market did last year.

If you’re thinking about making a move, then you need the specific data for your home and your area, and we’re happy to provide it.  Get in touch with us and we can set a time to talk about how to move you forward!

For many homebuyers, the first step on getting onto the property ladder is purchasing a condo apartment.  While they aren’t as plentiful in smaller towns or cities, when they do exist they are almost always the cheapest option if you’re considering buying a home of your own.

For much of 2024, we’ve seen very elevated levels of condo apartments for sale.  As of December 20, 2024, there are 9,671 condo units for sale within the Greater Toronto Area.  If you’re wondering if that’s an unusually high level of options for condo buyers, the answer is a definitive yes.  We’ve currently got almost twice as many condo apartments for sale now compared to a couple of years ago.

With such high levels of supply and relatively few buyers on the demand side of the equation, there are many opportunities for getting a great deal on a condo apartment these days.  If you’re currently renting and are wondering if buying might make sense, then we’d say the answer is a definitive yes.  Let’s go through the math and explain why we think now is the time to get on to the property ladder!

What’s it cost?

While your specific situation will be different than the average, we gathered a bunch of data in order to be able to analyze the differences between renting and buying on an overall level.  We’ll make our assumptions clear as we go.

When we pull the data for the average cost to rent or buy a one-bedroom or two-bedroom condo unit in Toronto and beyond, here’s what we see.

The above chart uses data for the average rent and purchase price for Q3 (July to September) 2024.  We had to exclude Dufferin from this analysis as there just isn’t enough data to be reliable.

With an average rent in the GTA of about $2,500 for a one bedroom unit, or just over $3,200 for a two bedroom unit, it isn’t cheap to rent a condo apartment these days.  On the buy side, a one bedroom goes for about $578,000 in the GTA and a two bedroom costs about $200,000 more at around $782,000.

Durham is the cheapest place in the GTA to supersize your condo, as going from a one bedroom to a two bedroom condo adds just $77,000 on average.  Compare that against Halton, where buying a place with a second bedroom adds a whopping $250,000 on average.

OK, but what is the cost to carry a condo if you buy at those prices?

In order to do an apples to apples comparison, we ran the numbers to see how much it cost in each area to own that one or two bedroom condo unit.  Before we get to the results, let’s clearly state our assumptions:

• We assumed a 20% down payment, so there are no CMHC insurance costs, and we calculated the mortgage cost using a 4.99% interest rate with a 25 year amortization period.
• We put maintenance fees at $550 per month for the one bedroom units, based on the idea that such units are typically in the 500 to 600 sf range, and maintenance fees of close to $1 per sf are common these days. For the two bedroom unit, we upped that to $750 per month, based on the idea that they will be a couple of hundred square feet larger than the one bedroom units.
• We assumed a 0.07% mill rate for the property tax as that is a reasonable rate across the various municipalities in the GTA. We used the actual average price as the assessed value but given MPAC is always a bit behind (and currently very, very far behind), our estimates for property tax will be on the high end.  Better to assume it will cost more than too little!

Obviously, any changes to the above assumptions will impact the end result, but we wanted to use some base calculations to be able to compare across the different areas and for the one and two bedroom condo options.  Here are the results.

Let’s see how those monthly carrying costs compare against the different markets and for one and two bedroom condo units.

We can see that it costs between about $750 to $1,150 more per month to own a one bedroom condo compared to renting it.  Peel has the lowest percentage difference at just 32% more per month and Toronto and York are tied at 45% more per month to own compared than renting.

For two bedroom condo units, the range goes from about $1,050 to over $2,000 per month.  In percentage terms, Peel once again has the lowest difference, where it costs just 35% more to carry a two bedroom condo than it does to rent one, and Halton is the worst area, where it costs 68% more to own a two bed unit than it does to rent one.

While this tells us which markets get the best results if you buy versus rent, it also tells us that if you’re an investor, Peel is your best option.  If the difference between what you can charge for rent and what you have to pay to own is the lowest, it means you don’t have too much of a spread to cover.  An investor who put down more than 20% would quickly approach a cash flow neutral or positive property if they bought in Peel.

It still seems like renting is cheaper.

There is one part of the rent versus buy calculation that is often overlooked, namely the percentage of the mortgage payment that is principal repayment.  This is important because while the monthly mortgage payment is money you as an owner need to have available, a portion of that payment is effectively a forced savings plan.

At the 4.99% mortgage rate and 25 year amortization we used for our mortgage payment calculation, the payment is about 28% principal repayment and about 72% interest payment.  That’s from the first payment and the way mortgages work means that every subsequent payment is slightly higher principal repayment and slightly lower interest payment.  For each of the markets we can calculate the effective monthly mortgage cost and get a revised effective monthly cost.  This isn’t what you’d pay each month, but it is the number if you recognize that more than a quarter of your mortgage payment is building your equity in the unit.

Here’s how that math works out, when we calculate the principal repayment and what the effective mortgage payment is once you remove that forced savings aspect.

If we take that effective monthly mortgage payment and add in our other costs, we get an effective monthly cost to own, which we can compare against the actual rent.  Doing so means that we see the difference between what it costs to rent versus own shrink tremendously.

For one bedroom condo units, the effective difference between renting and owning is as little as $97 a month in Peel, up to $345 per month in York.

With two bedroom units, Peel is just $222 more per month (effectively) to own a unit and Halton is the worst option, at $944 more per month.

Anything else to consider?

The final part of the buy versus rent calculation is appreciation.  While the condo market has been very tumultuous over the last couple of years, the historic average for condo units appreciation has been about 6.29% per year.  That’s a significant equity gain that you don’t receive if you are renting, but at the same time, you haven’t invested the 20% down that we used in our calculations, and that money could be appreciating if you invested it.

We consider this part of the conversation to be out of wheelhouse, as forecasting appreciation in a given market is very challenging, and we can’t speak to likely returns on invested funds in the stock market at all!  In a very general sense, we’ll just say that if you own a condo unit, when you eventually sell it, you will either benefit from market appreciation, or lose out on market depreciation.  Historically, we’ve seen real estate appreciate and we believe that will continue, but we’ll let you decide on what you think will happen with this aspect.

Put it all together and we see the buy versus rent question as having a clear answer.

The high rent being charged in the GTA, when contrasted against relatively low sale prices for one and two bedroom condo units, means that the difference between the costs for owning and renting have narrowed considerably.  When you take into account the principal repayment portion of your mortgage payment, the difference can be as little as about $100 per month in certain markets.  Even at higher differences between the effective carrying costs when you own versus renting, the gap is nowhere near as extreme as many people think.

If you have a significant down payment available, you like the idea of building equity in your own home versus your landlord’s income property and you think real estate will appreciate over time, then now is a great time to buy a condo.  If that sounds like you, then get in touch with us so we can run the numbers for your specific situation!

When short-term rental platforms like Airbnb and VRBO first arrived in Ontario in 2009, they offered a new option to home owners or investors who were interested in making money off properties.  By competing against hotels and offering short-term rentals, property owners could realize significantly higher rental income than they could by renting out the home or unit to a long-term tenant.

During the initial heyday of these platforms, most municipalities didn’t have restrictions on short-term rentals.  It took a while for the platforms to grow in popularity and for municipalities to begin to see some problems as a result of the change.

In Toronto, it wasn’t until early 2018 that City Council approved the regulation of short-term rentals in Toronto.  Up until that point, short-term rentals existed in a bit of a gray zone and we saw pure income properties being rented short-term as well as some principal residences.

The initial regulations in Toronto were appealed to the Local Planning Appeal Tribunal (LPAT) and as such did not go into force.  The hearing for the appeal took place in August, 2019, and the City eventually received a positive decision at the LPAT, so it wasn’t until November, 2019 that the short-term rental regulations came into effect.

Over time, the rules, fees and taxes that apply to short-term rentals have increased, and we’ve also recently seen the CRA crack down on the sale of such properties, with significant tax impacts.  It’s time for a review of what it costs to register and operate an Airbnb, and what happens when you sell such a property, to see if it is still a good option.  Here we go!

The Good Old Days

When Airbnb and other short-term rental platforms arrived in Ontario back in 2009, there were no licensing, fees or specific regulations in place for this type of rental.  Cities had largely left the regulation of rentals to the province, with bodies such as the Landlord and Tenant Board and legislation such as the Residential Tenancies Act.  Short-term stays were done by hotels and those businesses were established and run by corporations, rather than individuals who had a home they didn’t stay in all year round.

The Times, They Are A Changing

By late 2019, rules for short-term rentals were in place in Toronto, but even now (late 2024) a number of municipalities in the GTA don’t have things set in stone.  Whitby, Pickering, Aurora and Newmarket are still working on the regulations, and as such it hosts are really only concerned about following local zoning, property standards, and tax requirements.

The initial rules in Toronto had a Municipal Accommodation Tax (MAT) that was set at 4%. This tax applies to short-term rentals and supports city tourism and infrastructure. Registration fees for owners were a very reasonable $55.

In 2023, Toronto raised the MAT to 6%, ensuring short-term rental operators remit this amount quarterly. To simplify compliance, Airbnb and similar platforms began to offer a remittance option on behalf of hosts.

Beginning in 2025, registration fees are set to increase drastically from around $55 to $375, highlighting a stricter stance against non-compliant operators.

No Investors Allowed

As municipalities created the regulations for short-term rentals, most decided that such rentals would only be permitted in a homeowner’s primary residence.  If you were an investor and didn’t live in a home, you could rent it out long-term (more than 28 consecutive days) but short-term rentals were no longer permitted.

This was done due to concerns about housing shortages, as the proliferation of short-term rentals in residential units had begun impacting the long-term rental market.

As of November, 2024, this is the case in Toronto, Mississauga, Oshawa, Oakville and Burlington.  Basically, if the municipality has developed regulations, the rule is short-term rentals are only allowed if it is your primary residence.

Wait, what’s that about HST?

In addition to the registration fee and the Municipal Accommodation tax, owners of short-term rentals also need to be aware of HST obligations.

Airbnb rental income becomes subject to the HST if the rentals are for less than 30 consecutive days (one month) and the rent charged is more than $20 a day.  Given the cost of stays in Ontario, almost all Airbnb properties charge more than $20 a day, so if you a host is doing significant levels of bookings, HST is charged on the stay, and due to the government.  This is in contrast to long-term residential rentals, which are exempt from HST.

While charging and remitting HST can be either neutral or slightly beneficial (as you can claim input tax credits on costs incurred in renting the unit), a much bigger problem exists when the owner of an Airbnb property decides to sell.

In October, 2024, the Tax Court of Canada ruled on a case and held that the sale of a used residential property rented out on Airbnb is subject to HST on the entire sale price.  A reminder that resale residential properties (i.e. not a new build where you’re the first buyer) in Ontario don’t have any HST charged on the sale.  This is the case even if the property was an income property and rented out on long-term basis – but not if it is being used for short-term rentals.

In the ruling that came down, the judge ruled that at the time the owners sold the property, it was not a tax-exempt residential complex, since for tax purposes it was similar to a hotel, motel, inn, boarding house or lodging house. All of the condominium leases for the 14 months before the sale were for periods of continuous possession of less than 60 days, i.e, short-term rentals.

As a result of the “commercial rental operation” during that time, the entire sale price of the condominium was not exempt from HST.  This means that if you own and operate a property as a short-term rental, you can expect that the CRA will treat the sale of that property as one that should charge and remit HST.  The exact amount of HST owing would require a tax specialist to determine, but it is obviously significant dollars given the 13% HST rate.

If the seller doesn’t realize that HST should be charged, and doesn’t include wording in their Agreement of Purchase and Sale related to the sale price being plus HST (rather than inclusive of HST), they will be out of pocket for the HST that should have been charged.  Even if the seller knows this may happen, they face a situation where their property becomes extremely unappealing to buyers who will have to pay HST on the purchase, compared to another property they could buy that wasn’t used for short-term rentals and therefore doesn’t have HST charged on the sale.

In short, the disposition of properties that were used for short-term rentals may result in a significant loss of equity in the home due simply to the HST component that has to be made up for – either by the seller directly to the government, or by the buyer who would demand a reduction in the purchase price.

When an Airbnb host has to pay a registration fee, charge a municipal accommodation tax and charge HST, it is no wonder that the days when Airbnb was a cheaper option than hotels are gone.  As prices rise for guests, it seems logical that occupancy levels would be lower and that owners will make less revenue on the unit.

Add in the significant tax hit at the sale of the property and there is a very real question as to whether Airbnbs or other short-term rental options are still financially viable.  Long-term rentals may bring in less revenue on the surface, but with significantly lower costs to manage and operate and no HST issues upon selling, the equation has shifted considerably.

If you are considering how to best benefit from a property that you own that you don’t live in full-time, then we’d love to walk you though the options.  Get in touch with us and we’ll start the ball rolling!