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Amid the pandemic, rents are predicted to continue decreasing in the city
According to a new report, Toronto rents are decreasing slightly month by month.
In their National Rent Report, Bullpen Research & Consulting and Rentals.ca found that the average rent in Toronto dropped by 1.2 per cent between February and March 2020. Average rents for condo apartments declined 4.1 per cent from $2,648 per month in March 2019 to $2,539 per month in March 2020.
Despite an month-by-month increase, there was also a slight dip in annual rents across the country. The average rent for March 2020 was $1,842, an increase of 1 per cent from February. So far in 2020, rents decreased by 1.2 per cent from 2019.
The coronavirus pandemic has already impacted the housing market in Toronto: Tenants are withholding their rent out of necessity and solidarity, eviction orders are on hold and the number of home sales in Toronto dropped by more than 85 per cent this month. Meanwhile, with short-term vacation rentals temporarily banned in the province, former Airbnb listings are being injected into the long-term rental market, potentially increasing the vacancy rate.
Given these conditions, Ben Myers, president of Bullpen Research & Consulting, said in the report there were predictions that rents could “plummet” as much as 20 per cent. But he says it’s too early to predict what the impact of the pandemic will be on the rental market.
“Our expectation is that rental rates will decline in the coming months, but some of that decline will not be captured due to a big increase in upfront incentives,” said Myers.
Potential “upfront incentives” could include such as free month’s rent or in-suite improvements like upgrading appliances or ceiling fans.
“The market will not function normally over the next few months as the economy is on pause,” the report states. “It is important not to read too much into the data in April, May and June as it relates to the long-term prospects for the rental market, because a decline in rental rates is anticipated.”
Across Canada, Toronto rents continue to be the highest. Following Toronto, Vancouver rents averaged at $2,381, Etobicoke at $2,284, North York at $2,272 and Richmond Hill at $2,230.