6 things you need to know about the Toronto rental market

6 things you need to know about the Toronto rental market

Before COVID, finding a nice, reasonably-priced rental in a good location was essentially a pipe dream. Rent was high, demand was even higher, and supply was dismally low, making living in the 416 impossible for many. But the pandemic, despite all the challenges it’s brought us, has actually given renters a bit of a break: it has changed the rental landscape dramatically, and made living in the city more accessible to the average person again.

If you’re on the hunt for a new place to live, you’re a landlord, or you’re thinking about buying an investment unit to rent out, here are 6 things to keep in mind as you look at your options:

1. We’re in a renter’s market.

In Toronto, we haven’t had this kind of availability and pricing in YEARS, especially for traditionally hot downtown locations. There are a number of reasons for this shift. Job losses have forced many renters out of their apartments and into their parents’ homes or other shared living situations. Colleges and universities in the city are operating mostly online, so students (a huge percentage of Toronto renters) are mostly out of the equation, at least for this year. Population growth is down: immigration is at a standstill, which means another consistent source of renters has dried up for the foreseeable future. Tourism in Toronto has also ground to a halt, which means units that were being used as Airbnbs have now been added to the long-term rental market. And since condo sales have also slowed, owners having trouble finding buyers are also putting those properties in the rental pool.

All those factors put together have created a perfect storm for renters: landlords are catering to potential tenants instead of the other way around, and you’re looking at better prices, more choice and more time to compare your options, and you’re more likely to be approved.

2. Prices are softening.

It’s been a long time since you could get a deal on a downtown rental. But as supply piles up, prices naturally come down. And where we were seeing bidding wars for rentals before COVID, now the negotiation shoe is on the other foot: in this market, the renter has the advantage. The opportunity to shop around is greater than it’s been in recent memory, and you may even be able to negotiate a lower than listed price.

“We’re seeing a drop of as much as 20%, depending on the building and unit type,” says Adam Hoffman, Sales Representative. “Places with great layouts, spectacular views and upgrades are still moving well, but the properties that don’t show as a 10 are sitting on the market. If you’re okay with taking on a place that isn’t perfect – maybe it needs painting or the kitchen is a little outdated – you can probably negotiate and save hundreds of dollars a month.”

The best way to get a deal is to be an ideal tenant: good credit rating, good references, and you’re easily able to put down first and last. That’s a landlord’s dream right now, and a great history is a much bigger bargaining chip than it was before COVID.

One thing to remember, however: pricing and availability can vary wildly by neighbourhood, or even by building. If you’re looking to rent a condo but aren’t sure where the best options can be found, a Condo Pro can give you some great data-based insights to make a smart choice that gets you the best value.

Read more: Your definitive guide to Toronto’s housing market

Evictions notice

3. Evictions are allowed again.

Back in April, the Provincial Government put a hold on eviction hearings, hoping to help out renters hit hard economically by pandemic shutdowns, and keep them from getting kicked out because they couldn’t pay their rent. But that moratorium has ended, and evictions are back on the table. But that doesn’t actually mean that anyone is going to get evicted anytime soon: there’s currently a huge backlog on hearings, with that number growing as more landlords look to oust tenants for non-payment of rent.

That’s a tough situation for renters who are facing hard times. But it also impacts potential renters: the possibility of a unit not being vacated when it’s time for the new tenants to move in is a real concern. But there is a way around that.

“I recommend that people focus on vacant units,” says Hoffman. “It reduces the probability of issues.”

Right now, there’s a big selection, so there’s room to be choosy. And moving into a vacant unit doesn’t just means you’re guaranteed to move in on time, but that during COVID, you can have the peace of mind of knowing there’s been a time buffer between occupants.

4. A rent freeze is coming.

This is great news if you’re already in a rental or are looking for one...less so if you’re a landlord. If the proposed Helping Tenants and Small Businesses Act passes, it will prevent certain residential and commercial rent increases in 2021.

In the press release about the proposed legislation, Premier Doug Ford says:

"From the very beginning of this pandemic, our government promised the families, workers and small business owners of this province that we would have their backs and provide them with the support they need to get back on their feet. The crisis is far from over and the threat of a second wave is real, as are the challenges it will bring. That's why we need to take the necessary steps now to help families keep a roof over their heads and small businesses keep their doors open."

Student learning online

5. Students have left a big hole in the rental market.

When you add up the students attending Toronto’s colleges and universities right now, that number is in the hundreds of thousands. A significant percentage of those students rent, but with most schools operating virtually this fall and likely beyond (Ryerson University and York University have already announced that virtual teaching will extend into the coming winter semester), all of those rentals are left on the market.

Buildings that cater mostly to students have been hit particularly hard, and may offer good opportunities for renters looking for a reduced price. It’s a short-term window, however: when students return to regular in-person learning, those buildings will go back to normal.

Read more: Back to school tips for healthy learning this fall

6. It’s interesting times for investors.

The lack of renters has spooked a lot of landlords into selling off their investment condos, and supply in the Toronto condo market has spiked. Which makes it a good time to invest...if you can carry a unit for a little while without tenants, and charge rent that fits with the current market.

“Historically, the most challenging times also offer unique entry point opportunities,” says Hoffman. “For the right buyers, the softer condo market offers all kinds of possibilities.”

Looking to rent a home for less than you would have spent 6-12 months ago? There are definitely opportunities to be had. A Condo Pro can help you find the best value in the city, and ensure you get into the place that’s right for you. Connect with a Condo Pro today!

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