Condominium rentals in the Greater Toronto Area surged by 86.3% last quarter over Q4-2019, owing to a deluge of condominiums dumped into the long-term rental pool, says the Toronto Regional Real Estate Board (TRREB).
“Demand for condominium apartment rentals reached record highs in the second half of 2020, particularly in the fourth quarter,” Lisa Patel, TRREB’s president, said in a statement. “However, at the same time, growth in the number of available units far outstripped growth in rental transactions, as many investors chose to make their units available due to the impact of COVID-19 on tourism and the short-term rental market, City of Toronto restrictions on short-term rentals and the prospect of a vacancy tax.”
The 12,584 new rentals in Q4-2020 far outstripped the 6,757 leases during the corresponding period in 2019, owing to empowered renters who took advantage of listings increasing by 131.6% during that period to 33,280. The average one-bedroom condo rental in the GTA declined by 16.5% in Q4-2020 to $1,845 from $2,209 during the fourth quarter of 2019, while the cost of a two-bedroom unit decreased 14.5% to $2,453 from $2,868.
The majority of the leases were in the City of Toronto, which accounted for 10,047 of total leases last quarter.
“As we move through 2021, rental demand will remain strong as the economic situation continues to improve, especially as the pace of the vaccine rollout increases and immigration and non-permanent migration into the GTA accelerates. Eventually, this will result in much of the current rental unit inventory being absorbed, but market conditions will likely continue to favour renters through much of 2021,” Jason Mercer, TRREB’s chief market analyst, said in a statement.
Although there is clearly voracious demand from renters, particularly in Toronto proper, the proliferation of vacant condo rental units has put downward pressure on the rents commanded by landlords. But according to Royal LePage’s CEO, the demand will return.
“Actual rents landlords can get from new tenants is falling, so there’s clearly more supply than demand,” Phil Soper told CREW. “One of the mistakes people make is assuming everybody is abandoning the cities. In fact, a major contributor, perhaps the major contributor, is missing demand altogether. It’s missing demand that comes from foreign students, domestic students and new Canadians.”
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