The terrible {not so} secret about TOs condo rental market is now out?

[Roy N.]

There have been a small group of folks warning of the GTA's runway condominium market for a few years, but we are now seeing more concern being voiced in the places once cheerleaders for Toronto the infallible.

Just last month, Jason Kirby penned this article in MacLeans. 

Benjamin Tal, though acknowledging vacancies are likely to grow, was singing "Don't Worry, Be Happy" when interviewed by the Globe and Mail back in February.  {Note: there has been some skepticism about the 1.7% vacancy rate quoted in the article}

When you do a little more digging around, it appears that Mr. Tal and, perhaps even the CMHC itself, are not defining the vacancy rate the same for the condominium market as that tow which we are accustomed.

When we talk about vacancy rate in 2-bedroom apartments it is defined to be:

number of empty units  / total number of 2-bedroom apartments available for rent

Naturally, the vacancy rate is 1 - occupancy rate.

However, in the TO condominium market  - and likely others in the country - the reported vacancy rate is being determined  something along the lines of:

number of empty condominiums / total number of condominiums 

At first blush that looks like the above example for 2-bedroom apartments .. so what's the big deal you ask.   The problem is "total number of condominiums" is not "all condominiums available for rent", but literally all condominiums that exist in the GTA - including those which are owner occupied.

That's akin to saying the vacancy rate of Single Family Homes is equal to the number of empty single family homes / all the single family homes in Toronto.

With the above alternative definition for condo vacancy, the reported rate of 1.7% is worse than meaningless, it is blatantly misleading.   Say only 17% of condominiums are being offered for rent, then the 1.7% vacancy, among all condominiums - owner occupied and those being offered for rent - is really 10% of those condominiums being rented.

Big difference between a 10% vacancy rate and 1.7%.

Maybe I'm just late coming to this realization, but its the only way I can make the oft quoted vacancy rate jive with the numbers produced in CMHC's Condominium Owner's Survey (COS) report and other sources.

Perhaps those of you in the Big Smoke might be able to shed a little light on the above measurement of vacancy for condominiums ... @Gary McGowan your on the ground daily, what are you seeing for real world vacancies in the condominium space?