In recent years, Toronto’s rental market has been characterized by decade-low vacancy rates, limited available supply, and high demand. However, the immediate economic impact of COVID-19, the social-distancing measures it brought on, border closures, and restrictions on schools, workplaces, and businesses had a domino effect on the rental market in Q2.
“Previously, it was rather difficult and competitive for renters to attain their desired unit, particularly in the downtown area,” says Andrew Kim, a Zoocasa agent who specializes in Toronto’s rental market. Kim notes that in the early days of the pandemic in March and April, many renters who were unsure how COVID-19 would affect their jobs and daily lives chose to terminate their leases to seek out better affordability, find a larger space, or live closer to family. The market began to pick up again as Ontario progressed through reopening in June, however the full picture of recovery remains unclear in the face of ongoing healthcare uncertainties.
To better understand the extent to which the condo rental market was impacted by COVID-19, Zoocasa reviewed quarterly data from the Toronto Regional Real Estate Board (TRREB) to highlight how condo apartment rental listing and lease rate trends have shifted across Toronto’s various neighbourhoods. Our data offers a bird’s eye view of condo rental market movement in the second quarter of 2020. For a more detailed analysis, condo investors and renters should more closely review listing trends for properties that match their needs in their neighbourhoods of interest.
Our findings show that across most City of Toronto neighbourhoods, there was a divergence between condo rental listings added and the number of leased units: most areas experienced an increase in the number of rental listings added while the number of leased units dropped. For the City of Toronto as a whole, condo rental listings grew 45% year-over-year (y-o-y) in the second quarter of 2020, while the number of condos leased declined 25% for the same period.
Condo Rental Listings Grew in 25 Toronto Neighbourhoods; New Leases Grew in Just 3 Neighbourhoods
Across the City of Toronto, condo rental listings noted y-o-y growth in 25 neighbourhoods, while just 3 neighbourhoods saw growth in new condo leases last quarter.
New condo rental listings in Q2 increased in the double digits in 20 neighbourhoods across the city. Of these, 5 neighbourhoods noted faster growth in condo rental new listings than the city average. This includes the C01 (Downtown, Entertainment District, CityPlace, and Liberty Village) neighbourhood that is popular for short-term rentals, where listings rose 80% y-o-y in Q2, while there was a 14% y-o-y decline in condo leases in Q2.
Just 3 neighbourhoods noted an annual increase in condo leases in Q2, however, according to Jim Roberts, a Zoocasa agent in Toronto’s East End, in two of these neighbourhoods this increase may have little to do with COVID-19 at all.
Roberts noted that in neighbourhoods like C11 (Leaside, Thorncliffe Park, Flemingdon Park) and E01 (Leslieville, Riverside, Little India) the supply surge was simply due to occupancy beginning at a few brand new buildings and not a direct impact of COVID-19. In C11, new listings rose a whopping 461% y-o-y in Q2 and there was a 352% increase in new condo leases. In E01, new rental listings increased 53% in Q2 and new leases increased 106%. E01 is the only neighbourhood where the rate of new leases outpaced the growth in new listings.
According to Roberts, the glut in supply in both neighbourhoods is good news for renters as it puts downward pressure on prices in these neighbourhoods. However, renters in these new buildings in particular should keep in mind that once these units are complete and they register, many investors may head for the exit door looking to sell and cash in on their investments. This could create a situation where the tenant is forced to leave if the new buyer plans on moving into the property.
Among all the neighbourhoods in our analysis, four neighbourhoods noted a decline in condos leased greater than 50% y-o-y, most prominently in W04 (Yorkdale-Glen Park, Weston) where new listings were flat, but condo leases declined a staggering 62% y-o-y.
Average Condo Rental Price Decline in a Third of Toronto Neighbourhoods in Q2
With new condo supply available to offset the high demand in most pockets of the city, average rental prices dipped 6% for the City of Toronto as a whole to $2,357. Of the 35 neighbourhoods studied, 12 noted average rental price declines.
C11 and E04 (Dorset Park, Kennedy Park) were the city’s most affordable neighbourhoods in terms of average rental prices. In C11, the average rental price declined 12% annually to $1,987 whereas in E04, prices remained stable y-o-y at $1,960. These are the only two neighbourhoods in our analysis that noted average rental prices under $2,000.
Despite a drop in annual average rental prices of 9% in C02 (Yorkville, Annex, Summerhill) and 8% in C09 (Rosedale, Moore Park), both neighbourhoods maintained an average rental price above the $3,000 mark at $3,020 and $3,143 respectively.
Our infographic below highlights changes in condo rental listings and leases for 35 Toronto neighbourhoods. Further below, find lists of neighbourhoods with the highest rental new listing growth and where average lease rates declined the most across the city.
5 Neighbourhoods With Highest Condo Rental New Listings Growth, Q2 2020
1. C11 – Leaside, Thorncliffe Park, Flemingdon Park
Condo rentals listed: 359 (+461% vs. Q2 2019)
Avg. lease rate: $1,987 (-12% vs. Q2 2019)
2. C02 – Yorkville, Annex, Summerhill
Condo rentals listed: 736 (+88% vs. Q2 2019)
Avg. lease rate: $3,020 (-9% vs. Q2 2019)
3. C01 – Downtown, Entertainment District, CityPlace, Liberty Village
Condo rentals listed: 8,152 (+80% vs. Q2 2019)
Avg. lease rate: $2,432 (-9% vs. Q2 2019)
4. E04 – Dorset Park, Kennedy Park
Condo rentals listed: 51 (+70% vs. Q2 2019)
Avg. lease rate: $1,960 (0% vs. Q2 2019)
5. E01 – Leslieville, Riverside, Little India
Condo rentals listed: 240 (+53% vs. Q2 2019)
Avg. lease rate: $2,202 (-9% vs. Q2 2019)
5 Neighbourhoods With Biggest Drops in Average Lease Rate, Q2 2020
1. C11 – Leaside, Thorncliffe Park, Flemingdon Park
Condo rentals listed: 359 (+461% vs. Q2 2019)
Avg. lease rate: $1,987 (-12% vs. Q2 2019)
2. C08 – Regent Park, St. James Town, Corktown
Condo rentals listed: 3,317 (+43% vs. Q2 2019)
Avg. lease rate: $2,239 (-11% vs. Q2 2019)
3. C02 – Yorkville, Annex, SummerHill
Condo rentals listed: 736 (+88% vs. Q2 2019)
Avg. lease rate: $3,020 (-9% vs. Q2 2019)
4. E01 – Leslieville, Riverside, Little India
Condo rentals listed: 240 (+53% vs. Q2 2019)
Avg. lease rate: $2,202 (-9% vs. Q2 2019)
5. E04 – Dorset Park, Kennedy Park
Condo rentals listed: 51 (+70% vs. Q2 2019)
Avg. lease rate: $1,960 (-9% vs. Q2 2019)
Update: This release was updated at 3:15 PM on Aug 19 to clarify that 25 neighbourhoods noted an increase in new rental listings for condo apartments y-o-y, from 26 neighbourhoods. The 26th neighbourhood (W04) was flat y-o-y. There were no changes made to the overall data set or findings.
Source and Methodology
The number of condo apartment rentals newly listed and leased for Q2 2020 and Q2 2019 were sourced from the Toronto Regional Real Estate Board (TRREB). The average lease rates displayed are the weighted average lease rates for bachelor, one-bedroom, two-bedroom and three-bedroom condo apartments. The average lease rates for bachelor, one-bedroom, two-bedroom and three-bedroom condo apartments by neighbourhood were sourced from TRREB.
An annual percentage change was not calculated if there were fewer than 20 newly listed condos or leased units in Q2 2020 and/or in Q2 2019.
Contact
For more information about this report or to set up a media interview, please contact communications@zoocasa.com.
