Toronto rent prices are finally starting to drop amid the pandemic
The biggest of clouds have the brightest of silver linings, it sometimes seems, and COVID-19 — tragic as the pandemic's consequences have been — could actually be starting to help mitigate Toronto's affordable housing crisis.
A little bit, at least.
Newly-released data from Bullpen Research & Consulting and the apartment listings website Rentals.ca shows that rent prices in Canada's largest city actually dropped 1.2 per cent between February and March of 2020.
On a year-over-year basis, one-bedroom units across the City of Toronto were down 2.2 per cent, falling from an average rent price of around $2,260 in March 2019 to $2,213 last month.
The average rent for condo apartments in old Toronto, specifically, declined by 4.1 per cent over the same period of time and now sits at $2,539.
The @Rentalsdotca National Rent Report for April 2020 is now out. The average rental rate in 🇨🇦 was up m/m, but down again in Toronto: https://t.co/l480SXEXre #VanRE #ToRE #Rentals @BullpenConsult pic.twitter.com/FT9lrUI8H6— Big Ben Myers 🐂✒️ (@benmyers29) April 15, 2020
Purpose-built rental apartments, on the other hand, grew more expensive in Toronto between March of 2019 and 2020, rising 11 per cent over the course of one year, but still falling 1.2 per cent last month.
"With most of the country on lockdown during the second half of March, the housing market is not operating normally, as most prospective tenants can't view units, existing tenants don't want to leave their homes in the midst of a health crisis, and the number of people moving will fall significantly," explained Bullpen's president, Ben Myers, in his firm's April 2020 rent report.
Despite this, Rentals.ca observed a 1.0 per cent increase in average monthly rent prices across Canada between February and March of 2020.
Cities with massive year-over-year price growth, such as Montreal (+35.1 per cent), Hamilton (+22.8 per cent) and London, Ont. (+27.2 per cent), helped buoy the significant declines of cities like Saskatoon (-13.7 per cent), Fort McMurray (-12.8 per cent) and Burnaby, B.C. (10.3 per cent).
If you're thinking about moving, it will cost you about half as much to rent an apartment in Saskatchewan than it does in Ontario pic.twitter.com/Sj6Rxp1i2m— Big Ben Myers 🐂✒️ (@benmyers29) April 16, 2020
Monthly and annual rent declines in the City of Toronto have been moderate so far, but Myers says it's hard to predict what will happen based on data from March alone.
"Most provinces have prohibited evictions, as many tenants can’t make rent due to either a temporary closing of their place of employment, or being laid off due to COVID-19," he writes.
"Considering all these factors, there is concern that average rental rates across Canada could plummet as much as 20%. March data might be too early to assess the impact of the pandemic on the Canadian rental market, but if the results are any indication of what is to come, a 20% decline isn't likely."
Myers says that it's similarly important "not to read too much into the data in April, May and June" as it relates to long-term prospects for the rental market while the economy is halted.
"A decline in rental rates is anticipated," he notes. "The one counter to that forecast is that people who need a place to live are going to be reluctant to buy in uncertain market conditions, especially with some lenders likely choosing to be very selective and risk averse. So they will choose to rent instead."
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