Toronto rent prices declined for 8th straight month and are down big since last year
The COVID-19 pandemic has had an unprecedented effect on Toronto's rental market, making the city just slightly more affordable for anyone brave enough to move amidst the public health crisis.
The latest Toronto and GTA rent report from rentals.ca and Bullpen Research & Consulting tells a similar tale, indicating that the average monthly rent in the Greater Toronto Area declined for the eighth straight month to $2,194 in July and is down 8.7 per cent annually.
And in the former City of Toronto (pre-amalgamation boundaries), the average rent for all property types was down nearly 11 per cent last month, from $2,530 in July 2019 to $2,261 in July 2020.
"With a large part of the workforce still working from home, there is a greater need for more space for home offices and a diminished need to be near a downtown office," said Matt Danison, CEO of Rentals.ca, in a statement.
Indeed, the world of COVID-19 has created a new set of needs for renters in Toronto, with many opting to move further out of the city now that working from home is the norm and location is less of a concern.
When looking at rental rates by property type, it's clear that condo apartment rents have trended downward quickly, especially when compared with rental apartments and townhouses.
Condo apartment rents in Old Toronto experienced a 13 per cent annual decline in July, according to the report, while townhouses saw an annual decline of eight per cent and apartments decreased by just 1.9 per cent.
"Rental apartments were hot in 2019, and the January 2020 annual growth rate was just under 17%. COVID-19 and the lack of demand that ensued resulted in a quick drop in the average rent, which turned negative by April," the report notes.
"However, average rent has trended up the last two months, and the annual growth rate was about 2% in July 2020. Keep in mind that incentives are not netted out, and several new apartment buildings are offering one and even two months of free rent."
On average, the report suggests that landlords asked $260 per month less for condominium apartments in the GTA in July 2020 compared to July 2019, and the average single-family property was more than $350 cheaper per month than July 2019 — but townhouses rental rates were slightly higher.
"It doesn't matter how old the condos are, rent declines appear to be impacting all products available. If the rental market continues to soften, look for more investors to sell their suites, as the July data indicates more strength in the resale market with sales up 7% annually, and prices up 9% annually in the GTA," said Bullpen Research & Consulting Inc President Ben Myers in the report.
"It is still too early to tell if the re-opening of the economy will result in increased rental demand, but owners and landlords will have to be more creative in marketing their properties given the increase in competition and vacancies."
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