Rental prices dropping in Toronto and the GTA amid pandemic

A recent report by Bullpen Research & Consulting Inc. and torontorentals.com finds that the average price of rent has dropped significantly for all property types in the city—falling 5 percent year over year and month over month. In April 2019, the average rent was $2,476 dropping to $2,362 in April 2020.

Steeper declines can be seen when the rent is broken down by region, type and size.

Toronto’s purpose-built rental apartments dropped 11.2 percent from March to April of this year—now standing at an average of $1,945.

There was a 4.2 percent drop in condominium apartments for the same period of time with average prices falling from $2,400 in March to $2,299 in April.

The most significant declines were seen in larger units as suites that are rounded to 1,300 square feet dropped 20.2 percent from March to April of 2020.

"Landlords are responding to this lower-demand market by adjusting their asking rents," said Ben Myers, the Bullpen Research president. "Every unit size range declined month over month from 300 sf to 1,400 sf."

"It is clear from the chart that demand has fallen more heavily for the larger and more expensive units than the smaller more affordable units."

When compared to last year, rental prices vary by GTA municipality.

In Richmond Hill, prices have actually increased along with Mississauga, Brampton, Etobicoke, Scarborough and North York, year over year. Scarborough still has the cheapest rent in the GTA—averaging just $2,023 across all types of units.

The largest declines in price per square foot in Toronto proper can be seen in condo apartments.

"There has been much discussion regarding the short-term rental market, as tourism in the GTA has all but stopped, and employment that attracts shorter-term contract work has been put on hold," writes Myers. "The suites were also being rented to host parties and events, and those are not happening either."

Analysts say that "prime downtown markets" are seeing the steepest declines in Yorkville and near the waterfront.

The research also examined rent trends in certain "major developments."

"Some major developments experienced noteworthy declines including Three Hundred on Front Street and Massey Tower on Yonge Street at -13% monthly, as well as Smart House Condos on Queen Street at -11%, and 87 Peter at -7%," says the torontorentals.com report.

"Rental demand has plummeted in Toronto as tenants stay in their current accommodations for fear of exposing themselves to COVID-19 and unemployment soars with the pandemic lockdown, reducing move up, move-down movement, as well as the creation of new households from recent graduates, students and immigrants," Myers said.

"Many landlords have tried to entice tenants to make a move in this uncertain time by lowering their asking rent."