The rent prices in Toronto keep dropping while the global pandemic continues. This happened for several reasons, since demand dropped significantly and some residents decided that this is not the best time to seek for another home. In addition to that, some landlords decided to change their short-term Airbnb rentals into permanent ones, which also increased availability units in the market.
For those looking for a new rental, this is the perfect timing to look for a new place in Toronto. The average rental prices dropped 5% per month compared to the same time last year. According to a report from torontorentals.com, the prices dropped from $2,476 in April of 2019 to $2,362 in April of 2020.This includes every type of rental properties all over Toronto.
If broken down by type and region, the prices dropped even more significantly. For example, a purpose- built rental in the Toronto area, plummet 11.2% compared to the average of last year, bringing the average to $1,945.
Condo apartments descended 4.2% between March and April of 2020, reaching an average of $2,299 compared to $2,400 for the same period last year.
In comparison to condos and apartments rental unit market, larger-sized units are the ones who got most affected by the price drops. These units experienced a decrease of 20.2% between early months of 2020, compared to the same time period from 2019.
In order to adjust to the new low demand on the rental market, landlords are decreasing their prices. According to Bullpen research, the demand dropped remarkably specially for bigger units, as to small-scale and more affordable units.
The areas that rental prices actually increased are Richmond Hill, Mississauga, Etobicoke, Brampton, North York and Scarborough. Scarborough still is the most affordable place to rent in the GTA, with an average of $2,023 on all unit types. Short-term condo apartments experienced an expressive drop per square footage, month over month.
The new reality faced right now induced a discussion around short-term rentals. Tourism and employment that usually attracts this type of rentals are now put on hold, and the places that were before rented for parties and events are now also in pause since they are not happening at the moment.
Surprisingly, the areas that experienced the most drop of prices were the waterfront and Yorkville areas. Torontorentals.com and Bullpen Research focused on specific major development listings to be able to identify which buildings were more affected by the price drops. They found out that Three Hundred on Front Street and Massey Tower located at Yonge Street, decreased 13% per monthly and, Smart House Condos on Queen Street decreased 11% per month as well.
The demand has dropped outstandingly in Toronto since individuals believe it is not a good time to move out, since they fear visiting other units and increasing the chances of being exposed to COVID-19. Also, the unemployment rates are higher now because the pandemic, and some tenants prefer not to risk moving out at this time because of financial reasons. Also, the limitation of students and immigrants to enter Canada, and the increased demand of people that decided to go back home, contributed to this new rental scenario.
The new rental scenario is one of the best ones in years for those looking for a new place, no matter if it is a fancy condo or a single bedroom in an apartment. Landlords are encouraging tenants to move in by decreasing their monthly rents.
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