The COVID-19 pandemic has changed Toronto’s housing market, impacting the condominium landscape the most.
This means the average rent is now $2,038 from $2,508 in November 2019.
The report said to expect rental rates to continue to decline into early 2021 as the lockdown limits in-person viewings, COVID cases increase, and the border remains restricted for new immigration.
Therefore, the decrease in demand will be met with an increase in supply. Based on data from the Canada Mortgage and Housing Corporation, 2020 will likely set a 30-year high for new apartment completions of about 100,000 suites.
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“A crackdown on short-term rentals in the city of Toronto, plus the potential for a vacant homes tax will increase supply further in Canada’s largest rental market,” the report said.
The downtown markets in Toronto and Vancouver have taken the biggest hits and, like other metro rental markets, are affected by a lack of immigration, fewer students renting, and fewer new graduates renting their first properties.
Last year, the average rent for one- and two-bedroom apartments increased by 7% and 10% respectively, on an annual basis. Both bedroom types grew by another 8% in 2020. Part of this rise can be attributed to an increase in vacancies at new “purpose-built” apartment projects.
While the average rent is expected to continue to drop in the first quarter of 2021, it will slowly start to recover in the second half of the year, finishing at $2,120 per month on average in December 2021, a 4% annual increase.
It’s important to note that Toronto is still one of the country’s highest-priced rental markets, even with the decrease.