After more than a year of falling prices, Toronto rents are showing very early signs of a potential turnaround, according to new market insights published this week by Rentals.ca.
In the April National Rent Report authored by Rentals.ca and Bullpen Research & Consulting, recent data from the Toronto region shows that one-bedroom rent prices posted a small monthly gain in March — from February to March 2021, they climbed by a modest 0.3 percent to an average price of $1,810.
Toronto’s rental market recorded declines in every month of 2020, as well as in January and February of this year, across all property and bedroom types. The gain recorded in March is the first time Toronto has posted an increase in rent prices since December 2019, Rentals.ca told Livabl.
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And Toronto is not alone in seeing signs of life in the rental market. The report explains that Canada’s major urban centres — Toronto, Montreal and Vancouver — showed ‘slight increases in average monthly rent for all property types in March over February.’
“Despite the drop in rent on a national level, there are signs that the rental market has bottomed out, with monthly rent increases in Vancouver, Toronto and Montreal,” said Ben Myers, president of Bullpen Research & Consulting, in the market report’s press release.
“With the likelihood that downtown offices will reopen within the next year, it is clear that some tenants are taking advantage of the lower rents and greater choice to secure a better location or bigger unit than they had prior to the pandemic,” he added.
While rent may have risen for one-bedrooms on a monthly basis, it’s still down considerably from an annual perspective. Last month, Toronto reported an 18.3 percent year-over-year drop in the average price for a one-bedroom rental. The average cost for a two-bedroom rental in Toronto also experienced a nearly identical decrease, falling by 18.2 percent annually last month to $2,370.
Of the 35 markets the report analyzed, Toronto recorded the steepest price drops in both unit types nationwide. The average rent in Toronto was down by $467 annually to $1,987 in March, a 19 percent decrease from the same period in 2020.
The report points out that Toronto’s downtown core has been hit the hardest by declining rents, with prices dropping between 20 to 25 percent annually in some areas. The ‘outer-416’ regions of the city, however, have performed slightly better with prices decreasing in the range of two to nine percent year-over-year. Fewer post-secondary students looking for apartments, low levels of immigration and a hot resale market have been contributing factors to lower demand for rentals, the report notes.
Despite the large price declines, Toronto still ranks as the second-most expensive Canadian city for renters. Vancouver topped the list with the average price of a one-bedroom rental down by 3.7 percent year-over-year to $1,932, and two-bedroom listings down by 11.8 percent annually to $2,598.
The Toronto region cities of Burlington, Mississauga and Markham ranked below the City of Toronto within the top five most expensive rental markets in Canada, according to the report. In third place, Burlington rents for one-bedrooms declined by 4.9 percent year-over-year to $1,771, and by 3.8 percent to $2,006 for two-bedroom rentals. Ranking fourth, Mississauga rents dropped annually by 9.6 percent for one-bedroom units to $1,739, and by 8.7 percent to $2,058 for two-bedroom apartments. Rounding out the top five, one-bedroom rent prices in Markham decreased by 6.1 percent year-over-year to $1,739. For two-bedrooms, rents declined by 11.7 percent to $1,920.