Toronto sees the return of bidding wars for rental units
Rent prices continue to rise in Toronto as the city slowly recovers from the impacts of lengthy lockdowns, but not all unit types are seeing the same level of demand — and those at the top of the renter's wish list are getting harder to land.
This represents a year-over-year decrease of about four per cent, but an increase of four per cent on a monthly basis. Broken down by unit size, single-bedroom units rose one per cent between June and July to reach a new average of $1,855.
Two-bedrooms, meanwhile, rose 4.2 per cent to reach an average price of $2,606, with "larger and more centrally located luxury units" increasing in price at a faster rate than more affordable options.
"With the 75th and 90th percentile units increasing at a faster rate than the 10th and 25th percentile units in Toronto, the idea that larger and more centrally located luxury units are increasing in demand is reinforced," reads the newly-released report.
"This continues to bolster the idea that more and more tenants are searching for larger living spaces to accommodate working from home and going out less."
These findings are consistent with what we've heard from other analysis firms in recent months, many of which are reporting an uptick in demand for downtown rentals in general as employees prepare to return to their offices in the core.
But things are changing in terms of what renters are looking for in their post-pandemic pads — affordable micro-condos are now taking a back seat to units that could accommodate the oft-talked about "hybrid model" of work, where a person would need both enough space for a home office and an address close their physical workplaces, should they be required to attend a few days a week.
Demand for this specific type of large, well-located unit has ushered in the return of bidding wars for rental suites — a phenomenon that near-completely disappeared amid the pandemic when rent prices tanked and landlords actually started courting potential tenants with unprecedented incentives.
"As employees get called back to the office, and colleges and universities announce their reopening plans, demand has increased significantly in central locations," says Bullpen Research president Ben Myers of the trend.
"Especially in Toronto and Vancouver where bidding wars are being reported again for rental properties."
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