Photo: James Bombales
The impact of COVID-19 on Toronto’s short-term rental market is becoming more apparent as new data points to an outsized surge of listings coming to market in downtown neighbourhoods popular with tourists and business travellers.
A new market report released by Zoocasa today highlights a significant upswing in June for both resale and rental listings in 10 downtown Toronto condo buildings known to be Airbnb-friendly. Zoocasa’s analysis found that the growth in listings in these 10 buildings last month greatly exceeded the number of new listings that came to market in both of the broader neighbourhoods and the levels observed across the City of Toronto.
The 10 downtown Toronto condo buildings were located in the Niagara and Waterfront Communities 1 TRREB regions that are known to be hotspots for Airbnb listings. These regions include the Entertainment District, Cityplace and Liberty Village neighbourhoods.
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Rental listings for the 10 buildings jumped by 257 percent year-over-year in June, with 350 units coming to market last month compared to just 98 units in June 2019. Last month, condo rentals in the City of Toronto increased by 83 percent year-over-year, with 6,845 new rental listings. This disparity in the percentage increases, according to Zoocasa, points to an outsized increase in these 10 Airbnb-friendly condo buildings.
Within the handful of buildings analyzed, Ice Condos I & II exhibited some of the highest levels of new rental listings in June, showing a staggering 547 percent increase in rental listings year-over-year. Last month, 97 units were put on the market, representing seven percent of the total 1,340 units in the building, and a significant jump from the 15 rental listings that were available in June 2019.
A sharp slowdown in summer tourism, along with students and other city renters giving up their leases as a result of COVID-19, has lowered rental prices while inventory has risen due to decreased demand.
“Despite the temporary two-month ban on short-term rentals lifting on June 5, a significantly slower tourism industry is forcing many short-term rental investors to consider recalibrating their income strategy to either seek long-term tenants or consider offloading their investment entirely,” explained the report.
On the resale side, 3,315 condo apartments hit the market in June across the City of Toronto, a 36 percent increase year-over-year. Among the 10 buildings listed in the report, resale listings grew by 108 percent annually, with 131 units on the market in June, compared to just 63 units in the same month a year prior. Between both the Niagara and Waterfront Communities 1 areas, new listings were up 65 percent year-over-year for a total of 711 properties.
However, demand for short-term rentals may resume in the near future. Andrew Kim, a Zoocasa realtor, noted in the report that as Toronto’s reopening continues, interest is picking up again. The wave of new rental inventory will also provide prospective renters with more options, unlike last year, when vacancy rates in Toronto were crushingly low.
“If you are a renter looking to move to the downtown area, now is the best time to take the leap if you can,” said Kim in the report.