The Toronto rental market experienced a turn of the table thanks to the Covid-19 pandemic. The market, which was once dominated by high demand and love availability of rental spaces, now has low rental demand. The city which would usually see low vacancy rates for a decade saw a growth of nearly 50% in the last quarter. Toronto condos for sale experienced a bit of a downtrend as single-family homes experienced a spike. However, the city where renters could barely get their desired units because of the competition, especially in downtown areas, has seen a rise in rental prices. In a turn of events, there are available rental spaces but increased rents.
A report from Zoocasa details that the COVID-19 pandemic has an adverse effect on the rental market as the restrictions placed on human social activities impacted the lives and jobs of a lot of individuals and families. Renter behavior was influenced by the pandemic seeing a lot of renters canceling their lease and moving to be closer to families and friends. This move caused a downward year-over-year of 22% on the price of listed condominium apartments. Also, immigration saw a downward trend of nearly two thirds just in Q2 due to the numerous restrictions placed on borders across the world.
In other words, due to multiple uncontrollable factors, the city of Toronto saw a decline of leased condos by 25% while condo listings grew to 45% year-over-year just in Q2 of 2020. Rental inventory on condo prices saw a rapid increase. There were 8,346 listings in July, an 82% increase from the listing in the same quarter in 2019. However, Toronto renters are not increasing as fast as the new rental listings with renters leasing only 11.5% units with 4,415 leases higher than from the same month in July last year.
There was a decline in annual rental prices in areas like Dorset Park, Kennedy Park, up to 12% year-over-year to $1,987. Other regions like Yorkville, Annex, and Summerhill maintained average rental prices above $3,000, at $3,020, and $3,143. While Rosedale, Moore Park experienced 9% and 8% drop, respectively. Areas like Leaside, Thorncliffe Park, and Flemingdon Park saw an increase of 461% in Q2 with 359 condo rentals listed. Also, areas like Downtown, Liberty Village, Entertainment District and CityPlace, saw a +80% with 8,152 condo rentals listed.
Currently, immigration is on hold, and so there is an anticipation of demand explosion as international students may return soon and renew their lease. Also, there is Airbnb, which has been placed on strict regulations for now, and it may soften soon. However, there is the problem of unpaid rents and evictions. Most renters who could not pay their rents during the pandemic might be in real competition for units. There may be more condos for sale on the market as well, according to Condomapper listings. Toronto isn’t alone in the price spike in real estate as it is affecting the entire country at the moment. Hopefully, the rental market might soften soon, and things might go back to normalcy.
