Posthaste: It’s getting cheaper to rent a condo in Toronto, as listings grow and leases fall

Good Morning!

COVID-19 continues to shake up Toronto’s condo market, a new study shows.

Up until the pandemic, Toronto’s rental market was known for low vacancy rates, limited supply and high demand. However, the closures and economic hits of the coronavirus are having an impact.

More condos are being listed for rent and fewer are being rented as newcomers into the city drop dramatically because of the virus and landlords switch from short-term rentals to long-term.

For the city overall, condo rental listings rose 45% year over year in the second quarter, while the number of condos leased dropped 25%, finds a study by online realtor Zoocasa, which drew on quarterly data from the Toronto Regional Real Estate Board.

Condo rental listings increased in 25 of the 35 neighbourhoods in the study, with 20 of them seeing jumps in the double-digits. In the neighbourhoods of downtown, entertainment district, CityPlace, and Liberty Village, which are popular for short-term rentals, listings rose 80%, and leases fell 14%.

Four neighbourhoods saw condo leases drop more than 50% from the year before, most notably Yorkdale-Glen Park and Weston, where leases fell 62%, though new listings were flat.

Three neighbourhoods saw an increase in condo leases, but in two of them this was because new condo buildings opened.

With condo supply growing, prices are dropping, the study finds. Average rental prices fell 6% for the city overall to $2,357. Twelve of the 35 neighbourhoods studied showed average rental price declines, with some dropping 10 to 12%.

While rents are cheaper, they are still not cheap. Rental prices dropped 9% in the upscale neighbourhoods of Yorkville and 8% in Rosedale, but still stayed above $3,000 a month.

There were only two neighbourhoods in the study that had rental prices below $2,000.

Zoocasa said the condo market showed signs of picking up again as Ontario’s economy opened further in June, but “the full picture of recovery remains unclear in the face of ongoing healthcare uncertainties.”