Prices for one-bedroom rentals in Canada’s largest city continued on a downward trajectory for the sixth consecutive month.
According to new market data released by Rentals.ca, Toronto rents for one-bedroom units decreased to $2,013 in August, equaling a 1.3 percent month-to-month decrease and a 13.8 percent yearly price drop. This marks the sixth month in a row that Toronto prices in the one-bedroom category have declined.
Similarly, rents for two-bedroom residences in Toronto dipped by 1.2 percent monthly and 8.9 percent annually to $2,655 during August.
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Despite price declines in both bedroom categories, Toronto remained the country’s most expensive city for one-bedroom rentals. However, when comparing data on a yearly basis, Rentals.ca found that average asking rents for condominium apartments in both Toronto and Vancouver were over $400 cheaper per month in August 2020 compared to the same month a year prior.
Rental rates dropped in Toronto and other neighbouring communities across the Greater Toronto Area last month. Mostly notably, Etobicoke, Old Toronto and North York saw average rental apartment and condominium apartment prices decline by 9 percent, 11.7 percent and 11.5 percent, respectively.
A number of factors are causing lower demand for rental units in Toronto, including fewer students living downtown, increasing newly-completed condo supply and tenants relocating to cheaper communities.
On the national level, low immigration levels, a lack of tourism and lower interest rates encouraging home buying continue to push rental prices down.
“Despite the lower rent levels and incentives offered by landlords recently, there is less financial motivation to move during a pandemic, especially with Ontario freezing rent hikes on all rent-controlled properties for 2021,” said Ben Myers, president of Bullpen Research & Consulting, in the report’s press release.
“The lifting of COVID-19 eviction bans in several provinces could lead to further supply hitting the market and further depressing rent levels,” he added.
Across Canada, the average rent for all property types listed on Rentals.ca dropped by 7.6 year over year to $1,769 per month in August.