The average monthly rent in the Greater Toronto Area (GTA) was down almost 13 per cent year over year in September to $2,131, declining for the 10th straight month, according to the latest TorontoRentals.com and Bullpen Research & Consulting Toronto and GTA rent report.
When controlling for bedroom types, one-bedroom suites are down 11 per cent and two-bedroom units are down 9 per cent in the GTA.
But this is not the whole story, as owners of recently completed high-end apartments, are offering significant discounts or incentives such as two months free rent.
The average monthly asking rent is taken from rental listings from all property types on TorontoRentals.com including: basement apartments, rental apartments, condo apartments, townhouses and other single-family homes. (The top panel in the chart below shows the decline for this year; the decline extends back to December 2019.)
Average monthly asking rents for condo apartments in the GTA in September ($2,199) were about $370 or 14.5 per cent lower than in September of last year ($2,571). Rental apartments have declined by 5.1 per cent annually over the same period from $2,124 per month to $2,016 per month.
The average monthly rent for rental condos in old Toronto (pre-amalgamation boundaries) in September has declined 16.9 per cent to $2,222 year over year. Rental apartments have seen average rent drop by 6.8 per cent annually to $2,082.
“Centrally located condo rentals in Toronto continue to see significant rent decreases, especially the smallest suites, as tenants look for cheaper units with more space to accommodate their work-from-home needs,” said Matt Danison, CEO of Rentals.ca “Newly completed buildings coupled with a lack of demand has resulted in condo apartment projects built since 2000 seeing an average increase in listings of 80 per cent annually on TorontoRentals.com.”
Data shows rents dropping for smaller units in old Toronto with the work-from-home phenomenon, and some urban residents’ desire to find more square footage at a lower price in outlying areas.
With units rounded to 500 square feet, old Toronto has seen average rents for condo and rental apartments decline by 8 per cent annually, 800-square-foot units are down by 5 per cent, while 1,000 square-foot units are up 1 per cent year over year.
In a smaller city such as Kitchener, real estate agents report tenants moving to their city for cheaper rents and larger apartments or condos. Rental rates for 500-square-foot units in Kitchener are up 20 per cent annually, 800-square-foot units are up 21 per cent, and 1,000-square-foot units are up 34 per cent year over year.
“Many younger tenants in the GTA are leaving the region, even if it is only temporarily, to take advantage of much less expensive rent levels in other cities in Ontario,” said Ben Myers, president of Bullpen Research & Consulting. “The average rental rate for a 1,000-square-foot condo in Kitchener is up 34 per cent annually, but is still cheaper than a 500-square-foot unit in Mississauga, Etobicoke, North York or Toronto.”
The average level of rental apartments under construction in 2020 is higher than any time over the last 30 years. The 10,408 units of rental apartments under construction in September is down slightly from last month’s figure, but up 35 per cent annually per data from Canada Mortgage Housing Corporation.
Condominium apartment units under construction in the metro area at the end of September increased 5 per cent year over year to 57,602.
Many of these apartments will be completed in 2021 and 2022, and will continue to add to the supply, which could keep rents lower if a vaccine is not approved during that time.
Ten selected neighbourhoods in old Toronto have seen declines in average rent per square foot for condominium apartments and rental apartments in August and September of 2020 versus the same two months in 2019.
Other takeaways from the latest Toronto and GTA Rent Report include:
- The condo apartment market in the former city of Toronto with an average monthly rental rate of $2,245 per month is down from the August 2019 high of $2,707 — a potential savings for the average prospective tenant of $462 per month.
- The average rent per square foot for downtown Toronto condos is down 13.6 per cent annually to $3.43 per square foot from $3.97 per square foot a year earlier, while rental apartments are down 10.4 per cent annually to $3.27 per square foot. In Etobicoke, average condo rental rates per square foot are down 0.9 per cent annually, while rental apartment rates are virtually the same in September as September 2019. In North York, condo rents increased by 1 per cent in September over the same month last year, while rental apartments are down 7.5 per cent following a big drop month over month. Mississauga has seen growth, with condos up 5.5 per cent year over year, and rental apartments up 11.7 per cent.
- Listings on TorontoRentals.com for condo rentals in the city of Toronto continue to increase with the decline in demand and increase in supply. For condos completed from 2000 to 2019, the number of listings increased every year. Listings were up 59 per cent with those completed in 2019.
The Toronto and GTA rent report takes a deeper dive into analyzing monthly, quarterly and annual rates and trends in the Toronto and the GTA rental markets.
Check out the October Rentals.ca and Bullpen Research & Consulting National Rent Report.