Toronto Condos – Q3 Rental Report
Unlike sales, which TRREB reports monthly, condo rentals are only reported by TRREB quarterly. The Q3 report came out recently, and the numbers show that the Toronto condo rental market is definitely feeling the effects of COVID-19. Specifically, units that would have in the past been short-term rentals (e.g. AirBnB) hit the long-term market, more than doubling the available units over the quarter. This had the predictable effect of pushing down rental rates – despite very strong demand.
Over the quarter, 14,036 condominium apartment rentals were completed through TRREB’s MLS® System. This was an increase of 30.2% over Q3 2019. However, the number of condominium apartments listed for rent at some point during Q3 2020 was up by 113.9% over Q3 2019. By the end of the quarter, the average one-bedroom condominium apartment rent was down by 11.1% year-over-year to $2,012 (compared to $2,262 in Q3 2019); and the average two-bedroom condominium apartment rent
was down by 9.2% over the same time period, to $2,672 (compared to $2,941 in Q3 2019). So, it’s a good time to be looking for a condo to rent!
It will be interesting to see what the condo re-sale market does for the remainder of 2020. (The October sales report should be out in the next few days.) If enough condos can be rented out long-term, we probably won’t see a correction in the condo segment. However, if we start to see the re-sale market inventory spike, prices will adjust. Of course, that’s not a bad thing – markets have a way of sorting themselves out! From my perspective, we’d be looking at a good time for first-time buyers to get into the market.
So, the COVID-related stall in the local tourism economy and downtown lifestyle seems to have pushed lots of short-term condo rentals into the long-term market. That has allowed renters to find better deals due to greater selection. It could also present a chance for first-time buyers to get into the ownership segment – and let’s not assume that we wouldn’t see new investors, too. But, Toronto is a growing city, and that growth will resume sooner or later. This renting/buying opportunity won’t last long.