Prices for new rental apartment listings went up in July, but the prices for all property types are down across the GTA
Landlords are raising prices on Toronto rental apartments even though the market is in decline.
A report from TorontoRentals.com says the price for new rental listings for all property types in the GTA was down in July to 8.7 per cent annually.
Condo apartment owners asked $260 less, year-over-year, for units hitting the rental market.
However, the average price for rental apartments went up 1.7 per cent to $2,065 per month.
Like most property types, Toronto rental apartments were trending up until COVID-19 hit. But while prices for other property types continue to decline during the pandemic, landlords for rental apartments are increasing rent prices on new listings again.
Basement apartment prices have been volatile over the past year, dipping and rising without any clear pattern. The average price for basement apartment rentals is $1,694, which is 4.6 per cent higher than July 2019. Listing prices for basement apartments were highest during the COVID-19 pandemic. They averaged $1,973 per month in May.
The Toronto rental report reiterates the downward trend in prices, particularly for condo apartments and especially in the downtown area. The waterfront area endured the biggest price drop, from $3.95 per square foot to $3.58. That is a 9.4 per cent decline, year-over-year.
Earlier this month, Zoocasa reported that downtown Toronto condo rental listings were up 80 per cent year-over-year in the second quarter. Meanwhile, leases in those areas were down 14 per cent over the same period. According to the Toronto Regional Real Estate Board, condo rental listings were up 42 per cent across the city , year-over-year, as rents were down 24.8 per cent.
Just as rents are declining on average, Doug Ford’s government announced plans to legislate a rent freeze in 2021. The plan has received a mixed reception among some affordable housing advocates.
The supply boost in the Toronto condo market could be a contributing factor to a major decline in real estate prices.
Home prices in Toronto are at an all time high this summer. But the Canada Mortgage and Housing Corporation (CMHC) has been warning that a steep is yet to come. The CMHC president Evan Siddall believes 14 per cent of Canadian mortgages are still in deferral. According to a report from LowestRates.ca, the deferrals that come due in September could trigger the real estate decline.
“The overall economy is continuing to struggle with elevated unemployment and businesses hesitant to spend,” says Justin Thouin, CEO of LowestRates.ca in a statement. “So far, hot housing markets like Toronto’s have shrugged this off, but there’s higher risk than normal now of that reversing.”