The average monthly rent in the GTA has dropped for the ninth straight month in a row, due to the COVID-19 pandemic.
According to the TorontoRentals.com and Bullpen Research & Consulting Toronto and GTA rent report, the average monthly rent has declined for the ninth straight month to $2,185 in August and down 10.8% year-over-year.
“The pandemic and its impacts have continued to weigh on the GTA rental market. Economic uncertainty, fear of moving for health reasons due to an uptick in positive COVID tests have reduced rental demand,” the report says.
Both one-bedroom and two-bedroom units in the GTA, are down $200 from their peak levels last year, recording year-over-year declines of 9.5% and 7% respectively.
For condo apartments, landlords were asking $2,582 per month in August, 2019 and now are asking for $2,253 per month in August, 2020— a 12.7% annual decrease.
And, rental apartments have declined by 2.1% annually over the same period from $2,101 per month to $2,057 per month.
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“Overall, the rental market in the GTA continues to decline, but much of that decline can be attributed to a significant drop in demand for condo rentals downtown,” the report outlines.
“When just focusing on the former City of Toronto (pre-amalgamation boundaries — not shown in the chart below), the condo rental market average rent is down 16% year-over-year. Rental apartments have seen average rents drop by 2.9% annually.”
But there are select regions where condo rent has increase.
In Etobicoke, the average condo rental rates per square foot are up 4.1% annually, while rental apartment rates are up 10% annually. And in North York, condo rents increased by 1.6% in August 2020 over the same month last year, while rental apartments are up 2.5%.
Mississauga has also seen growth, with condos up 6.3% year-over-year, and rental apartments up a staggering 12%.
“The declines can be attributed to less immigration, fewer students downtown, the work-from-home phenomenon, shifting demand to cheaper locations, and more completions,” the report says.
“One of the biggest factors is an increase in the supply of rental units due to a lack of tourism. Short-term rentals have been shifted to the full time market, especially small units in new centrally located condo projects.”
According to Ben Myers, President of Bullpen Research & Consulting, some of the “less affluent young professionals” are moving back in with their parents, while” the more affluent” are leasing their downtown homes to work from their cottage for the next year.
In order to help with high turnover for rent controlled building, a rent freeze and a ban on evictions could help.
The report also notes that the market is likely to “tread water” with further decline to be expected.