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peculators who bought into new Toronto-area subdivisions are flooding the market with single-family homes for rent, driving down prices in an effort to cover their costs. According to Michael Waters, CEO of Minto Group, these buyers likely purchased during the boom period (2021-2022) and are now taking delivery of their homes, only to find that they can't resell them at a premium.

    New subdivisions are seeing the impact of previous investment buying, with builder incentives making it easy to purchase detached homes as rental vehicles. Brandon Sage, a property manager and real estate investment adviser, notes that these communities are often oversaturated with rentals, making it harder for each property to secure good tenants and top rents.

    Data from Rentals.ca shows a 6% increase in single-family-home rentals from March to April, up 29% year over year. Rental prices are falling nationally, with houses and townhouses seeing average rents hit $2,166 in April, down 6.8% year over year. When narrowed down to detached houses, the growth in listings on Rentals.ca is more dramatic, with a 110% increase in the Golden Horseshoe-Greater-Toronto-area from 2023 to 2024.

    Some of this growth may be building on trends that were already happening, with many Toronto suburbs rapidly increasing their stock of single-family homes for rent. A Point2Homes.ca study showed that Markham had a 69% increase in single-family rentals (up to 9,545) and Brampton had a 44% increase (up to 16,720) from 2016 to 2021.

    Another contributor to the single-family house rentals has been owners who buy a second property but opt to rent out their original home rather than sell it. However, this trend has slowed down due to higher interest rates making it less compelling to rent out a property.