Average rent in the GTA down over 16 per cent annually for 2nd straight month: report

The average asking monthly rent in the Greater Toronto Area (GTA) for all property types was down more than 16 per cent year over year in December for the second straight month to $2,020, according to the latest TorontoRentals.com and Bullpen Research & Consulting Toronto, GTA rent report.

The average monthly rent in the GTA has declined 13 straight months.

The report suggests that the first half of the year will likely remain a challenge for landlords and owners as tenants have a lot of choice, and based on the recent data, they have benefitted from waiting further as rents have declined at a rate faster than at any time over the past couple decades.

According to the researchers, there is no indication that the decline in rents is going to stop any time soon, especially with the second lockdown in Toronto, more stringent stay-at-home orders in place, the borders still closed and the slow rollout of COVID-19 vaccines.

Data and anecdotal evidence shows that tenants are seeking more space while working from home. With students staying home in early 2021, expect that trend to continue as parents with children look for more space to conduct virtual learning. With rents declining as they have, tenants in a two-bedroom unit can almost afford a three-bedroom unit at the same rent level they paid for their two-bedroom unit last year.

One-bedroom units decreased by 14.3 per cent annually, the steepest decrease of all bedroom types in the GTA for the fourth quarter of 2020. Year-over-year, average rent declined by over $300 per month to $1,837, a rental rate lower than the average rent of $1,979 in Q4-2018.

Two-bedroom units also experienced a significant decline of 12.7 per cent from Q4-2019 to Q4-2020, $335 per month lower. Average rents had increased by nearly $310 in 2019 and all of that growth was erased.

The annual change in average rent in pre-amalgamation Toronto for condo rentals and apartments declined 19.4 per cent in December of 2020, with average rent at $2,024.

The suburbs continue to experience notable rent drops, with the “905” municipalities of Richmond Hill, Vaughan, Markham and Oakville all experiencing double digit decreases ranging from 11.5 per cent  in Vaughan to 16.2 per cent in Oakville for condo rentals and apartments.

Brampton, a municipality currently in the news for high COVID-19 rates, experienced a 10.8 per cent increase in average rent at $1,864. Brampton rental apartments increased by 6.5 per cent annually, while townhouse rentals increased by 10.1 per cent annually. Part of the rise can be attributed to a change in the composition of listings, with more townhouses and condo apartments compared to 2019.

Oshawa, the only other municipality with an increase in year-over-year average rent had the most affordable suites at $1,650 per month.

The annual change in average rent in pre-amalgamation Toronto for condo rentals and apartments declined 19.4 per cent in December of 2020, with average rent at $2,024.

The suburbs continue to experience notable rent drops, with the “905” municipalities of Richmond Hill, Vaughan, Markham and Oakville all experiencing double digit decreases ranging from 11.5 per cent  in Vaughan to 16.2 per cent in Oakville for condo rentals and apartments.

Brampton, a municipality currently in the news for high COVID-19 rates, experienced a 10.8 per cent increase in average rent at $1,864. Brampton rental apartments increased by 6.5 per cent annually, while townhouse rentals increased by 10.1 per cent annually. Part of the rise can be attributed to a change in the composition of listings, with more townhouses and condo apartments compared to 2019.

Oshawa, the only other municipality with an increase in year-over-year average rent had the most affordable suites at $1,650 per month.

Condo apartment rents continued their decline in Q4-2020, with December 2020 average rent falling 18.1 per cent compared to December 2019, from $2,535 to $2,077.

In December of 2019, the average rent for single-family properties in the GTA was about $2,870 per month, an increase of 6 per cent annually, while in December 2020, average rent declined by 9.3 per cent year over year to just over $2,600 per month.

Apartments average rents dropped to $1,933 in December 2020, about $160 lower than the December 2019 level, an 7.7 per cent annual decline.

“Rental rates continued to decline in the final month of 2020, and there is little evidence that rents will stop their downward trend anytime soon,” said Ben Myers, president of Bullpen Research & Consulting. “Despite anecdotal evidence that leasing activity has picked up, record condominium completions are expected in 2021, which reflects the record-high pre-construction condominium sales that occurred four years ago. Supply will continue to exceed demand in the short-term.”

With people working from home, small units have fallen out of favour, and with many of these units in the downtown area and used by students and young professionals just starting out, the pool of available tenants has shrunk substantially.

In 2020, the average rent for condo apartments in Toronto has declined 21 per cent to $2,095 per month. Looking at condo buildings completed over the past five years, the data is nearly identical over the last 12 months, dropping 22 per cent annually to $2,071 per month.

In December 2019, the average rent for purpose-built apartments in Toronto was $2,227 per month, falling to $1,958 per month in the final month of 2020.

Most of the postal codes in the downtown core declined by double-digits, with the most active area, M5V (King West, Entertainment District), experiencing a 12 per cent drop, while the M4S postal code that includes Davisville and the southeast quadrant of Yonge and Eglinton declined by 10 per cent annually.

You might also like

Leave A Reply

Your email address will not be published.

single-podcasts