Renters in Toronto have not been exempt from the shockwaves felt in the housing market caused by the pandemic. Economic challenges have been ongoing for well over a year, but so have the challenges of everyday life in general. More employers than ever are implementing cost-effective work-from-home – or anywhere – policies that enable them to maintain operational efficiency regardless of what’s happening out in the world crisis-wise. Many folks are keen on changing their everyday routines with the times, not wanting to go back to “normal.”
What this means for renters is that more individuals than ever are looking for lower rents outside of major metropolitan centres. Thanks to work-from-home policies and an increased focus on flexible workplaces, there is less of a need to worry about commuting downtown each day. Of course, there are other factors at play here behind the changing dynamics in the rental market in Toronto. Today, let’s explore them in more detail.
Not everyone is interested in living in the downtown core, so when the pandemic hit and offices closed, many people started to explore their options outside of the city. Because of this, rental prices began to drop considerably. This was a direct result of folks leaving heavily populated and more expensive urban centres for neighbouring communities, often in search of more square footage to accommodate their new home office as well as lower rents since many wouldn’t need to worry about commuting. Many landlords scrambled to fill vacant units in cities, providing various perks to attract new tenants while at the same time being more open to lowering rents. By January 2021, the rental market was still sluggish. In desperation to fill vacant units, the collective efforts of landlords resulted in rents across Canada dropping to their lowest point since COVID-19 first hit.
By March, Calgary was the only large city in Canada to see rental price increases. On the opposite end of the spectrum, Toronto’s average rent prices dropped by nearly 19% more. It took the gradual reopening and longing for things to do, new experiences, and employment opportunities resulting from said reopening to jolt the market back into an upward trend. This is why rental prices in Toronto are steadily increasing once more, though not quite to where they were at before the pandemic started. The ever-rising vaccination rates were the catalyst behind this renewed interest in rentals in the city. Just take a good look at the GTA, in general, to see this in action – built-up communities on the outskirts and the downtown core itself are seeing a massively recovered rental market, with the vacancy rate as low as 5.2% in the second quarter of 2021. Condo lease signings have effectively doubled in the past year. This means that, if you’re a property owner, now is the time to deliver the best possible balance of renter value and income assurance.
Of course, progress has been slowed by Delta variant outbreaks and rising cases, but this was not the case earlier in the summer when all signs pointed towards an ideal future seeming not too far off. How businesses respond to the effects of the Delta variant and the impact this has on the Toronto rental market is something we’ll be watching in the coming months.
Let’s also consider the other driving factors behind the increasingly lively rental market in Toronto, again related to steps towards pandemic recovery. The reopening of schools and workplaces that cannot implement a work-from-home solution has accelerated, meaning folks who need to rely on these facilities and means of employment are flocking back to urban centres and built-up areas where there are more opportunities and conveniences. In addition, the average purchase price of a home in Canada has absolutely skyrocketed, making such a prospect an unrealistic one for many. Therefore, people are preferring to rent, some waiting out the heated housing market until it settles while taking advantage of potentially more competitive rental prices before they rise too high. Immigration is also gradually on the up and up, though this and all the aforementioned factors remain dependent on how things unfold within and beyond our borders.
All-in-all, it is currently a fairly balanced market between renters and landlords. Rental prices aren’t quite as high as they were before the virus shook up the economy. In particular, units with low square footage are readily available in highly convenient, amenity-rich areas with more jobs, and landlords want to get them filled by great tenants. If you’re interested in seeing which rental properties are available in your area, view our listing map today. Alternatively, if you’re in need of our property management, development, or mortgage services, contact our team. We’re happy to assist you in any way we can, whether you’re a tenant or an owner!