It’s no secret that housing prices in Toronto have been skyrocketing for years and as a result, many prospective buyers have been pushed out of the market; subsequently, they’re forced to rent.
And unfortunately, rent isn’t exactly cheap in Toronto, either — even as the pandemic has influenced rent costs to decline throughout the city.
The average rent in the Greater Toronto Area (GTA) declined a total of 17% overall from January 2020 to January 2021, dropping from $2,411 to $1,993, according to a recent report from rentals.ca, with declines seen across all property types, including rental apartments, condos, and single-family homes.
But as you might imagine, just how much rent has declined varies greatly by neighbourhood.
According to the numbers, Toronto properties saw the largest declines, with rental prices down nearly 21% to $2,000 compared to 2020.
Etobicoke had the next largest decline in average monthly rental rates for condo rentals and apartments, falling 18% to $1,926. York and North York monthly rents were down in this category 15.7% and 15%, respectively.
READ: Toronto Rents Expected to Climb Another 4% by the End of 2021
Though, it looks like average rents in Scarborough fared the best over the past year, with rental prices in the area only declining 5% to $1,832.
York saw a more modest decline of 15.7% y-o-y to $1,810, while East York saw a much smaller drop, with prices falling by 7.2% to $1,791 over the past year.
The report also looked at the change in the average rent for small apartments from 400-sq.ft to 600-sq.ft by municipality (condo and rental tenure) in January.
According to the data, as of January, Oakville sports the highest average monthly rental rate at $1,803 per month (small sample size), down 6% from the previous year.
Markham is the second-highest at $1,759 per month, down 6% from the previous year. The average rent in Toronto experienced the largest year-over-year decline, dropping 23% to $1,691 per month.
The lower rent for Toronto reflects the fact that there are many more micro-suites at the bottom of that size range. With many tenants now working from home, the smallest suites in the market in Toronto are less desirable and have experienced significant rent declines.
“The smallest units in the market, ranging from 400 square feet to 600 square feet have really seen rents decline during the pandemic, falling 23% annually in Toronto," said Ben Myers, president of Bullpen Research & Consulting.
"With the second COVID lockdown still underway, a return to downtown offices is still likely a ways off, and the downward trend is expected to continue.”
Markham saw the smallest losses, with rental prices dropping just 5.6% to $1,759. Additionally, Markham has the second-highest average rent price of all the areas, coming second to Oakville.
The declines in rent per square foot are further examined in purpose-built apartment buildings, with the largest of the Toronto declines recorded in York where prices fell 11.6% to a low of $1,790.
Rents of purpose-built rental apartments in Etobicoke, North York, and Toronto also declined annually, with prices dropping 8.3% in Toronto to $1,938, 6% in Etobicoke to $1,883, and 5.7% to $1,926 in North York.
As the rental market in the GTA continues to soften, with average rents for all property types declining for 14 consecutive months, the smallest suites on the market continue to see the biggest rent declines as tenants seek out more space.
The report notes that rental rates could continue to decline for the next six months, as the vaccine rollout has been slower than expected.
With that in mind, if you’ve been thinking about entering Toronto’s rental market, now might be the best time, as asking rents are poised to see more declines over the next few months.
