Wanna hear something depressing?

I sprained my ankle on Saturday.

Bad, eh?  But that’s not actually the depressing part.

I rolled my right ankle, essentially stepping on my own foot, by doing one of the following:

a) Chasing a purse-snatcher down Bloor Street West after he stole an old lady’s handbag
b) Running into the endzone during an epic game of pick-up football at the park
c) Raking leaves on my front lawn, merely ten minutes into the exercise

Man, I’m not as spry as I used to be…

I swear, all I did was take a step over the front hedge and there was a slightly uneven surface on the lawn, from God-knows-what, and (insert sound of ankle squishing here), my right ankle rolled right over.

I fell down in pain, screamed out, and grabbed my ankle.  The pain sucked, but having rolled/twisted/sprained/broken each ankle now at least five times since I was fourteen years old, I knew that this was at least a three-week injury and I had planned to go for my first 16 KM run on Sunday, so this really depressed the hell out of me.

Even more depressing, however, was the look a passer-byer gave me as she was on her run, paused to stop and check on me, but then kept going!

Ah, I don’t blame her.  She was probably doing an early-season personal best, and why mess all that up just to help some random moron laying on his lawn, tangled up in orange extension cords from the Shop-Vac and the leaf-blower?

I’ve lost count of the ankle injuries.  1994 jumping from a playground.  1999 playing basketball.  2001 training for a karate tournament.  2002 doing Bosu-ball jumps at the Dunfield Club. 2005 training karate, again.  2013 during my bachelor party.  I know there are many more but (thankfully?) I can’t remember.

Perhaps it’s better to forget?

They say, “Time heals all wounds,” but I think they’re talking about emotional ones.

I’ll be gearing up for a May return to physical activity, as depressing as that is.

Time is passing pretty quickly, isn’t it?  I mean, it was just Christmas, and yet summer is right around the corner.

Last fall must have flown by because I realize now that I missed my quarterly installment of this blog theme!

Based on the quarterly analysis, we should have re-run these numbers in early-January!

So before looking at how the rental market has performed thus far in 2022, let’s look at how last year finished.

For those new to this feature, we want to look at the following:

-New Lease Listings
-Units Leased
-Absorption Rate

We’re only looking at condominiums, and while there are purpose-built rentals downtown, they’re a fraction of the data set and it’s much simpler to merely look at condos.  I do believe that the condo-only data paints a very accurate picture of the downtown rental market.

When we last looked at the data in November – looking back at July, August, and September, we had seen a new trend emerge in the form of a huge drop in the number of new listings.

That trend continued through Q4:

The 51% drop that we saw in September led to a peak of -54%, and then the decline tapered off.

But if we look at 2021 vs 2019, we’ll see that in actual fact, it was merely 2020 that seemed like an outlier.

New listings were up year-over-year in Q1, but that’s because we compared to pre-pandemic levels.  Once the pandemic was underway in 2020, we saw new listings double over 2019, and thus the 2021 data looks like a return to “normal.”

The same conclusion can be drawn from looking at Condos Leased:

You can start with that glaring ‘640’ figure in April of 2020, where the eye is drawn.  Or, perhaps your eye is drawn to the ‘293%’ figure for YOY change in April.  Either way, you start to realize that the 2020 pandemic skewed this data somewhat, and thus the 2021 over 2020 comparison is slightly misleading.

As we discussed last year, the spike in Condos Leased in June/July/August of 2021 was surprising, but note that the YOY trend came down significantly in Q4.

Having said that, the YOY absorption rates were still up in Q4:

Interesting, right?

Even with leasing activity down, we saw an increase in the absorption rate.

While early-2021 may have trailed 2019, Q3 and Q4 both saw an absorption rate higher than 2018 through 2020 inclusive:

The July and December peaks in absorption rate are worth noting.

Alright, now that we’re through last year’s analysis, let’s move on to 2022.

Some colleagues were lamenting last week that they’re losing bids on rentals left, right, and centre.  One colleague said she lost twice in the same day with the same tenants!

Is that what’s happening out there right now?  From speaking to a few other colleagues, it would seem so.

But is the data from Q1 going to support that, or are we merely seeing the market heat up in early-Q2?

Let’s look at Q1 New Lease Listings:

New Lease Listings are down 30% in January, year-over-year, but consider that they’re also down from 2020!

Last month, we saw New Listings up over 2019, 2019, and 2020, but not 2021:

It’s so hard to look at these graphs with all the 2020 data in there.

While we analyzed this data in both 2020 and 2021, I kept saying, “In a few years, we’ll know if this as an outlier due to the pandemic or just a sign of increased activity moving forward.”

I think it’s clear that, while condo leasing activity is moving higher, perhaps the 2020 levels aren’t quite a new benchmark to base future years from.

As for Condos Leased, the year-over-year declines were larger than the year-over-year declines in New Lease Listings:

Again, we saw absolutely ridiculous activity in 2021, so how do we draw conclusions?

As you can see in this graph, the trend for 2022 thus far is following 2021, even if it’s not at the same level:

It’s interesting, because for all the talk last year about how Work From Home is a trend that’s going to change the face of the downtown rental market, we saw much higher leasing activity.

So far in 2022, we are beyond 2018, 2019, and 2020 levels, but clearly trailing last year.

What was it about 2021 that made so many people transact in the rental market?  Was it the return to downtown of all those people who left during the 2020 pandemic?  Time will tell.

But so far in 2021, the downtown condo lease market looks to be busy, so long as we’re not comparing to 2020.  The stories I’m hearing about multiple offers on leases are reminiscent of those very busy and very frustrating times in the rental market over the last few years.

When we tie this all together and look at the Absorption Rate, we see that the the trend thus far in 2022 is toward a tightening market:

It’s tough to draw comparisons when we have months that were slow because of the 2020 pandemic and year-over-year figures that were affected as well.

However, the absorption rate in January and February was down from 2021, but it’s drawn just about even in March.

Then again, compared to 2018 and 2019, it’s down.

If the trend continues, we should see an absorption rate in April that’s pushing 90% or more, which would indeed make for extremely tight market conditions.

Last year, we saw the absorption rate peak in the summer, and the chart shows you that this is actually quite common:

While I run this column quarterly, I will most certainly take a look at the data in two weeks when April is through.

Rental prices have increased.

According to Bullpen Research & Consulting who sends out a monthly rental report, Average rent in the GTA was up 11% annually in February, from $1,988 per month in February of 2021 to $2,206 per month in February of 2022.

I don’t have March data, but I’m willing to bet that by the time we move through April, we’ll see not only a higher year-over-year rental increase but a higher absolute rent as well.

If any of you are in the lease market or happen to be looking to lease, I’d love to hear your first-hand experiences on current market conditions.