After more than a year of falling rental prices in the Toronto area, signs suggest that prices may have 'hit bottom.'
In March, while rental prices fell 19% year-over-year, monthly prices rose ever-so-slightly by 0.7%, from $2,007 to $2,021, marking the first time of month-over-month increases since January 2020, according to Bullpen Research & Consulting and TorontoRentals.com latest Toronto GTA April Rent Report.
While slight uptick in average rents is minor, it's the first sign that the GTA rental market may have hit bottom and could start trending upward after a tumultuous year of lockdowns from pandemic.
This comes as the average number of page views on the website's Toronto page was higher in March compared to February for units of all bedroom types both downtown and in the rest of the GTA. Part of the rise can be attributed to the more active spring market, but this also could be another sign that demand is picking up.
According to the report, rents peaked in November 2019 at about $2,600 a month. By February 2021, the average had fallen about $600.
While March experienced a monthly increase, Ben Myers, president of Bullpen Research & Consulting, said "it is too early to say if it is a statistical blip, or a sign the market has bottomed out, and rents are going to rise again.”
In March, downtown Toronto condo and apartment rents saw the biggest year-over-year declines -- dropping 20.3% to $2,016. Etobicoke and East York saw a slightly smaller decline of about 18%.
The rent drops continued in regions surrounding downtown: declining 15.3% in North York, 14.5% in Markham, 11.5% in Mississauga, 10.5% in Vaughan, and 7.2% in Brampton and Scarborough.
"We’re unlikely to see the typical boom in leasing activity in the spring market in 2021, but a more stringent mortgage stress test, and a desire for tenants to secure the lowest rent possible and take advantage of the numerous rental incentives, could push up demand and average rents over the coming months,” said Matt Danison, CEO of Rentals.ca.
This comes as national rent prices are also showing signs of hitting bottom, with the average asking rent for all Canadian properties listed on Rentals.ca hitting $1,685 in March -- down $157 (or 8.5%) from $1,842 in March 2020.
According to the latest numbers, Vancouver still remains the most expensive city for renters on the hunt for one and two-bedroom homes, with average monthly rents now sitting at $1,932 and $2,598, respectively.
While Toronto finished second with average monthly rent for a one-bedroom home in March at $1,810 and average monthly rent for a two-bedroom home at $2,370.