The average monthly rent in Toronto is down for the seventh straight month as a one-bedroom now costs under $2,000.
According to a recent report by Rentals.ca, of the 35 cities analyzed, Toronto is still the most expensive with the average monthly rent for a one-bedroom home in September at $1,967. The city also came in third for highest average monthly rent for a two-bedroom.
But, month-over-month, average rent for a one-bedroom was down 2.2% and down 3.3% for a two-bedroom. In addition, year-over-year average monthly rent for a one-bedroom was down 14.9% in September and down 12% for a two-bedroom.
“Toronto is seeing the biggest decline in rental and condo apartment rental rates on average among major municipalities in Canada; this is driven by the rapid decline in downtown condo rents, with many recently completed buildings seeing rates drop by 10% to 15% annually,” Ben Myers, president of Bullpen Research & Consulting said.
“Several of the condos experienced listings growth of 100% to 200% annually — a textbook example of what happens with less demand and more supply.”
According the the report, the decline in average rent downtown can be attributed to the high number of condos for rent. There is also the shutdown of many of the office towers, and a reduction in demand for short-term rentals from tourists and out-of-town contract workers.
With Ryerson, the University of Toronto downtown, as well as other colleges, seeing students decide to stay with their parents during the pandemic vacancies have increased.
The average rent in M5B, where Ryerson University is, has declined by about 9% annually to $2,212 per month, while M5S, where the University of Toronto is, has seen average rents decline by 5.7% annually to $2,564 per month.
“Demand has dropped off due to COVID-19, and there is a significant influx of new supply hitting the market via completed projects,” it adds.
For other GTA cities, Mississauga came in third for average monthly rent for a one-bedroom home at $1,932 and eighth for average monthly rent for a two-bedroom at $2,152.
Burlington finished fourth for average monthly rent for a one-bedroom home in September at $1,883 and 12th for average monthly rent for a two-bedroom at $2,009.
Oakville came in sixth for average monthly rent for a one-bedroom home at $1,841 and fourth for average monthly rent for a two-bedroom at $2,268.
North York finished seventh for average monthly rent for a one-bedroom home in September at $1,819 and for average monthly rent for a two-bedroom at $2,189. Year-over-year, average monthly rent for a one-bedroom was down 5.5% in September and down 11.9% for a two-bedroom.
Brampton came in 13th for average monthly rent for a one-bedroom home at $1,614 and 15th for average monthly rent for a two-bedroom at $1,904.
Oshawa finished 21st for average monthly rent for a one-bedroom home in September at $1,360 and 19th for average monthly rent for a two-bedroom at $1,661.
Toronto and North York, along with Winnipeg, saw drops in rental rates of about 14%.
“Toronto’s 14.1% drop is the worst in the country among major markets,” the report notes.
But the entirety of Canada is seeing a change, with September rent down 9.5% annually.
The reports suggests that tenants are looking for larger units, either by square footage or by number of bedrooms, but appear to be avoiding the most expensive single-family properties and condominium apartments in prime neighbourhoods.
“Many prospective tenants desire more space as they work from home,” Matt Danison, CEO of Rentals.ca said.
“We encourage our clients to highlight any extra space such as a den which can be used for office space or amenities such as fast internet, which can make working from home easier.”
And, rental rates are being affected by unit size with so many tenants working from home and seeking more space.
Rentals.ca data shows average rents declining 4% annually for rental apartments around 400-sq-ft in Canada, and average rents increasing 17% for 1,100-square-foot rental apartments.