Year after year we watch Downtown Toronto rents go up: the more central the location, the higher the rental price for the unit, right? Not this year! The situation of COVID-19 has created some unusual conditions that are causing a softening of the Toronto rental market in the downtown core.
“The average one-bedroom condominium apartment rent was down by 11.1 per cent year-over-year in Q3 2020 to $2,012 compared to $2,262 in Q3 2019. The average two-bedroom condominium apartment rent was down by 9.2 per cent over the same time period to $2,672 compared to $2,941 in Q3 2019.” – TRREB Market Watch
As some Canadian real estate markets are hotter than ever, it seems that supply of rental properties continues to outweigh demand significantly in Toronto’s core as a result of several factors:
Working From Home
Many workplaces are accommodating employees by allowing them to work from home, and some have even made this their new permanent solution moving forward. Many of those who live in the downtown core do so in order to forgo the commute to work, and some who live outside the city rent a pied-de-terre in downtown Toronto for Monday to Friday use. With the duration of the pandemic, many Torontonians are re-considering their needs, giving up their downtown rental apartments in favor of the space that the suburbs can offer.
University students make up a considerable portion of renters in downtown Toronto, including students whose parents live nearby in Ontario and international students who come to Toronto to study. Leases that were signed by students between July and September of 2019 expired in Q3 2020, as some students return home to live with their parents and others remain in their home countries.
Decrease in Tourism
Due to the strict COVID-19 regulations in Ontario, many investor-owners have taken their short-term rental listings off the market and listed them in the traditional residential rental market.
So what does this mean for you?
- If you are currently renting an apartment in downtown Toronto, you can potentially take advantage of this situation by negotiating a lower lease rate with your landlord, based on lower market rates around you.
- If downtown is where you’d like to be post-pandemic, this might be a great time to lock-in at a low rent before they increase back to previous levels.
Whether you’re looking to move or re-negotiate your current situation, give us a call! We get paid by the landlord, so we offer a service that is “free” for tenants. Contact our team today to get started.