As a sign of the times, October marked the first month since March 2020 that average rents in the Greater Toronto Area (GTA) increased year over year.
The average monthly rent for all property types in the GTA was up 1.6% in October to $2,137 over October 2020 ($2,103), according to the latest Bullpen Research & Consulting and TorontoRentals.com Toronto GTA Rent Report.
"October marked a milestone in the COVID-19 recovery; average rents were up year over year for the first time since the pandemic started,” said Ben Myers, president of Bullpen Research & Consulting. “For anyone who has looked for a rental apartment in the past, nothing is more normal than rising rents in the Greater Toronto Area. One and two-bedroom condo and rental apartments units have been very popular, especially in the downtown postal codes of M5A, M5V, and M5G. This is particularly impressive given that new condo and rental completions in the City of Toronto will finish 2021 at the second highest level in over 20 years (per CMHC data).”
Since the onset of COVID-19, average monthly rental rates steadily declined throughout 2020 and into the early part of this year, hitting a low of $1,971 in March before beginning to slowly climb. The start of 2021 saw studio units, one-bedroom, two-bedroom, and three-bedroom units experience 14% to 18% year-over-year declines in average rental rates. Four and five-bedroom units did not experience the same levels of decline, according to the report.
The ongoing narrative that tenants are leaving the downtown core for larger units in suburban areas -- especially as city offices remain closed -- is still showing up in the data, according to the report. The average rents for Richmond Hill, Burlington, Ajax, and Markham all experienced annual increases in average rent of over 7% in October.
Meanwhile, Toronto experienced an annual increase of 3.9% in October. The main downtown Toronto postal codes have all experienced significant annual rent growth, with two of the most active areas, M5V and M5A, seeing average rents increases of 13.6% and 15.5% respectively.
Comparing October figures to March of this year, prospective tenants in the GTA seeking a studio unit will have to spend $60 more on rent based on the average asking rents; tenants looking for a one-bedroom could spend $120 more than they might have in March; while two-bedroom units are nearly $160 more expensive per month than they were seven months earlier.
The average rent for condo apartments has risen 11.8% over year from $2,161 per month in October 2020 to $2,416 per month this October. But the average investor-held condo for rent is still $145 per month cheaper than October 2019, as the average rent steadily declined the latter half of 2019 and all of 2020, highlights the report.
Average monthly rents for condo apartments increased 13.6% year over year in Toronto in October, after being down 17.7% in October 2020. In Etobicoke, average monthly rents for condo apartments increased 14.8% year over year in October, after being down 15.2% in October 2020.
The report points to data from three active condo buildings shows the “roller coaster ride of rents since 2019.” Average monthly rent at Ten York declined 16% year over year in October 2020 followed by an annual increase of 17% this October. The average rent at Harbour Plaza - East Tower declined 25% in October 2020 before increasing 12% in October. Average monthly rent at 87 Peter decreased 15% in October 2020 before increasing 10% in October.
GTA Apartments have yet to experience the same levels of recovery as condo and single-family homes. Year over year, the average rental rate for apartments has declined 2.2% from $2,013 in October 2020 to $1,969 this October. “One caveat here is that incentives for apartments were high last year at this time, and many of those incentives are no longer offered. Many vacant units in higher-rent areas such as Toronto have now been leased, leaving a higher share of the listings in lower-rent areas,” reads the report.
Average monthly rents for single-family homes have risen 16.6% year over year in October, an increase of more than $400, from $2,532 in October 2020 to $2,953 this October. Although average rental rates declined throughout most of 2020 for single family homes, rents in October have surpassed the peak levels of 2019.
As the pandemic recovery efforts continue, rents are on the rise not only in the GTA, but across the country as well.