The new rental listings for AirBnB-friendly condominiums in June far outpaced Toronto apartment rentals, due to the COVID-19 pandemic.
While short-term rentals were allowed by the province again in June 5, a recent report by Zoocasa shows that that lagging tourism industry is hurting companies like AirBnB, by forcing investors to either seek long-term tenants or consider offloading their investment entirely.
This can be seen when looking at new listings in June 2020 for City of Toronto condo apartment rentals which grew 83% year-over-year with 6,845 units added to the market in June.
Comparatively, rental new listings for the downtown buildings included in the analysis grew a staggering 257% annually, with 350 units listed in June compared to 98 last year.
To understand the extent to which COVID-19 and short-term rental bylaws may have impacted condo investors and renters so far, Zoocasa reviewed the number of new listings for rental and sale properties in a selection of 10 condo buildings in downtown Toronto that currently or until recently permitted short-term rentals, or are known to be popular on Airbnb.
Among the buildings reviewed, Ice Condos I & II on York Street had a 547% increase in new rental listings year-over-year, with 97 units coming on to the market in June compared to 15 new listings during the same time last year.
Based on the estimated 1,340 units in the building, the 97 rental new listings represents about 7% of the total units.
According to Zoocasa agent Andrew Kim, the pandemic created a steep increase in inventory and a drop in rental prices due to lower demand.
He notes that since travel to the city remains limited due to the pandemic, the demand for short-term rentals is still comparatively low despite restrictions lifting on June 5th.
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However, as the city opens up and COVID-19 cases decrease, he notices that the demand for long-term rentals is beginning to pick back up again.
“If you are a renter looking to move to the downtown area, now is the best time to take the leap if you can,” says Kim.
He highlights that the influx in inventory gives renters more options to choose from at a better price, which is a different picture from last year when rental vacancies were at an “all time low.”
Compared to last year, new listings for sale in AirBnB-friendly condominium buildings doubled in June 2020.
New listings for sale across the 10 buildings grew 108% year-over-year, with 131 units listed in June 2020 compared to 63 last year.
This increase was noticeably higher than the overall increase across the Niagara and Waterfront Communities 1 neighbourhoods in which these buildings are located in; in these neighbourhoods combined, the increase in new listings for sale was up 65% to 711 units.
For the City of Toronto as a whole, 3,315 condo apartments were listed in June, up 36% annually.
Overall, with prices below market value and landlords willing to make compromises, Zoocasa says, now is a good time for interested renters to lock in a downtown condo in a prime location.