From the week beginning on March 16th to the end of the month, Toronto condo rental lease volumes fell 25 percent when compared to the same period in the previous year.
First quarter GTA condo rental data published today by Urbanation found that while the January to March period was the strongest on record for condo leases in the region, the final weeks of the quarter saw a steep decline in transactions as the disruptive effects of COVID-19 settled in.
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Even just looking at activity in March, Urbanation found lease volume declined 39 percent in the second half of the month when compared to the first.
“The decline in rental transactions can clearly be related to the impact of the protective measures and economic uncertainty stemming from the onset of COVID-19 pandemic, with renters less willing or able to take on a new lease at current rents, as well as the closing of Canadian borders and the logistical challenges with showing units and planning for a move in the current environment,” wrote Urbanation President Shaun Hildebrand.
Unlike the trend now unfolding in the Toronto resale market with sales and listings precipitously declining in tandem as the crisis continues to grow, the condo rental market is currently facing a softer decline in rental supply on the market.
Rental listings fell only seven percent in the post-COVID-19 period in March from a year earlier. Urbanation attributed the more modest decline in rental listings to an uptick in condo completions through the first months of the year, tenants who could not pay their rent needing to vacate their units and short-term Airbnb rentals being added back to the long-term rental pool.
According to Hildebrand, the areas to watch will be the duration of COVID-19’s impact on the GTA rental market and how rents will be influenced by the wide range of bleak economic indicators.
“As rental demand declines as job losses mount, incomes are reduced, and immigration shrinks, the slowing in the GTA rental market that appeared in the last half of March will progress for at least the next few quarters given the current economic outlook,” said Hildebrand.
“The impact on rents will be something to watch, which will also be influenced by the timing of the record number of units that were expected to complete this year,” he added.