Furnished condo rental listings offered for standard 12-month leases in the Toronto region increased 52 percent in the second quarter of 2020 compared to the same time last year, according to new data released this week by Urbanation.
There were 1,877 furnished units being offered across the GTA from April to June, making up 12 percent of all condo rental listings during the quarter. The elevated figure also represented 21 percent of the increase in total condo rental listings compared to the same period a year ago.
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The data from Urbanation is another clear indication that many former short-term rentals that once occupied Airbnb and similar platforms are quickly migrating to the long-term rental market.
Toronto’s short-term rental market has been hit with a one-two punch this spring as new stricter rules that require rental hosts to register with the city were coupled with ordinances prohibiting owners from renting out dwellings that are not within their principal residence.
At the same time, the COVID-19 pandemic decimated tourism and business travel and the province banned short-term rentals for all but essential uses for most of the spring.
Many experts believe that a wave of former Airbnb units hitting the long-term rental market or the resale market is one of the biggest potential sources of volatility in the Toronto region’s housing market.
“The City of Toronto estimates that there are between 8,000 and 10,000 Airbnb units that would not be compliant with new upcoming short-term rental regulations, some of which may end up on the resale market,” wrote Diana Petramala and Victoria Colantonio, researchers at Ryerson University’s Centre for Urban Research, in a note published late last week.
Beyond a pronounced rise in Toronto condo listings on the resale market this summer, there’s no direct evidence yet that a wave of former Airbnb units is hitting the market. Urbanation’s second quarter data indicates that it’s possible that owners are trying their luck with the long-term rental market first. Even then, they may not necessarily choose to sell their units if they can’t lease them out right away.
Urbanation’s report offers a clue concerning current renter demand for furnished units. According to its second quarter data, the average rental price for a furnished unit dropped 12.5 percent over the previous year to $2,492 as lease activity fell 24 percent.
Of the overall health of the Toronto region’s rental market, Urbanation President Shaun Hildebrand said it’s clearly been impacted but it remains in an “orderly” state despite the economic volatility.
“The GTA rental market has been clearly impacted by COVID-19, though the transition has been orderly so far with vacancy remaining low and rent declines being modest outside of some specific pockets in the city. Government income support has played a big role as job losses mounted and immigration dropped,” Hildebrand said in a media release.