Rental prices in Toronto decreased significantly since the beginning of COVID-19 as the demand for rental units continued to drop.
Toronto was known for its expensive rental market in the past, but because of the pandemic, the city experienced its lowest prices in the last three years, and many people are taking advantage of these more affordable prices before the demand starts rising again in 2021.
“Tenants are moving into condos that they wouldn’t have been able to afford a year ago… and people are moving out of the family home because they can now afford to be on their own and rent a condo due to the reductions in lease prices,” said Melissa Thornton, a real estate sales representative.
“Many tenants have not renewed their leases as they have moved in with friends or family because of job loss or a reduction in their hours due to COVID-19,” Thornton said.
Isabella Miller, a recent university graduate, is one of the people who decided to take advantage of the lower rental market.
“I decided to move because my lease was up on my previous place, and I did not want to continue living there,” Miller said, leading her to start online apartment hunting journey with her current roommate.
Job losses due to COVID-19 appear to have had the greatest effect on rent prices. The latest national rent forecast reported the loss of income, immigration slowing down, and Toronto losing its central demographic of tenants from the market as factors in dropping rents.
“I personally know a lot of people that weren’t able to renew their visas because of COVID-19, so I think a lot of people are going home, and people just physically can’t afford places like that anymore,” Miller said.
The national rent report for January 2021 showed the rent of a one-bedroom unit in Toronto reduced by 20.4 per cent since the start of the pandemic, followed by 17.5 per cent for a two-bedroom unit.
“The price probably would have gone up if we had not moved here during COVID-19,” Miller said. “We were able to get that slightly reduced price.”
“I’ve lived in other places before that were still quite expensive,” she said. “Prices have definitely gone down, and I think that’s partially because you can’t use the amenities that would have raised the price of a unit.”
Thornton said landlords are nervous now because of the job losses since the pandemic began, “and are looking for what we refer to as A+ tenants.”
The challenges of the pandemic forced landlords to come up with incentives and offer additional bonuses to find tenants, including a month or two of free rent, gift cards, and move-in cash discounts.
“I wish that I’d waited a little bit longer, I was actually getting a bit of a rush to move out of my previous place, [if I] had waited longer I feel like I would have been able to negotiate a much better price,” Miller said.
The data from December 2020 from Bullpen Research and Consulting reported rental prices in the city are expected to keep decreasing for the next three to four months until mid-2021, then the rental market will start increasing with a modest rise.
“I’m going to try to sign a lease early summer,” Miller said. “Hopefully somewhere cheaper.”