Up 1.6 per cent for all property types, GTA rents reached $2,137 on average for the month of October compared to $2,103 a year ago. Having steadily declined throughout 2020 and into the early part of this year, average rents hit a low of $1,971 in March 2021 before slowly climbing.
The narrative that tenants are leaving the downtown core for larger units in suburban areas is still supported by the data. Average rents for Richmond Hill, Burlington, Ajax, and Markham all experienced annual increases of over 7 per cent in October, while Toronto experienced an annual increase of 3.9 per cent.
The start of 2021 saw studio units, one-bedroom, two-bedroom, and three-bedroom units experience 14 per cent to 18 per cent year-over-year declines in average rental rates. Four- and five-bedroom units did not experience the same levels of decline.
The yearly declines have slowed in recent months, with October data showing that studio units were down 1.8 per cent while one-bedroom units declined 0.7 per cent annually. Meanwhile, two-bedroom units decreased by 0.3 per cent year over year.
When comparing October figures to March, prospective tenants seeking a studio unit are looking at spending $60 more based on 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 ago.
“October marked a milestone in the COVID-19 recovery,” said Ben Myers, president of Bullpen Research & Consulting. “Average rents were up year over year for the first time since the pandemic started. 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)”
Average monthly rents for single-family homes have risen 16.6 per cent since last October, an increase of more than $400 a month. Although average rental rates declined throughout most of 2020 for single family homes, rents in October have surpassed the peak levels of 2019.
The average rent for condo apartments rose 11.8 per cent since last October from $2,161 per month in 2020 to $2,416 per month this year. But the average investor-held condo for rent is still $145 per month cheaper than it was in October 2019, as the average rent steadily declined the latter half of 2019 and all of 2020.
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 per cent 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.
Other key takeaways from the November Rent Report:
- The average rent for apartments did not experience the same levels of decline as condo apartments, and have stayed steady throughout the pandemic. Condo apartments, after a long period of annual declines, are on the path to recovery as average rental rates are moving higher than the early 2020 levels.
- 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 rent increases of 13.6 per cent and 15.5 per cent respectively.
- Average monthly rents for condo apartments increased 13.6 per cent year over year in Toronto in October, after being down 17.7 per cent in October 2020. In Etobicoke, average monthly rents for condo apartments increased 14.8 per cent year over year in October, after being down 15.2 per cent in October 2020.
- Data from three active condo buildings shows the roller coaster ride of rents since 2019: Average monthly rent at Ten York declined 16 per cent year over year in October 2020 followed by an annual increase of 17 per cent this October. The average rent at Harbour Plaza – East Tower declined 25 per cent in October 2020 before increasing 12 per cent in October. Average monthly rent at 87 Peter decreased 15 per cent in October 2020 before increasing 10 per cent in October.
Click on the National Rent Report for more info.