If you’ve spent any time looking at rental listings lately, you’ve probably noticed an interesting new trend: in addition to lower rents (yay!), landlords are offering a variety of bonuses and incentives to attract tenants.
“I’ve seen two months of free rent with at least a year-long lease, as well as things like six months of free parking or storage,” says Crystal Chen, an analyst with rental tracker PadMapper, in a recent interview with Bloomberg.
We’ve also come across these amazing incentives:
Plus we’ve seen all kinds of move-in bonuses like gift cards, free internet, free renter’s insurance and even a free air conditioner for your unit.
Those are some serious incentives—and great reasons to move into a new place. In other words, if you’re a Toronto renter right now, you’re laughing! Or, better yet, you’re crying tears of joy as you upsize to that high-floor two-bedroom you’ve always wanted.
These perks are a stark contrast to the world of low supply and bidding wars that was the reality in the Toronto rental market pre-COVID. Rents were getting close to those in Vancouver and New York, if not surpassing them. Today, we’re witnessing an unprecedented price drop in the rental market—one of the rare positive by-products of this pandemic (positive for renters, that is).
While no one could have predicted the COVID-19 outbreak, the impact it’s having on the rental market isn’t hard to understand. There’s simply far more supply than demand.
First of all, there are the effects of the abrupt collapse of the vacation industry. As cited in Bloomberg, the number of short-term listings (less than seven months) in Toronto surged 104% year-over-year during the third quarter, while the number of long-term listings has increased by 47%. This points to the fact that many vacation rentals, such as AirBnBs, are being converted into long-term rentals.
A second factor to the supply-demand imbalance is the lack of movement into the city by people such as immigrants, students, and out-of-province workers.
The big incentives are in high-rise buildings
An interesting element of these market changes is that they seem to apply mostly to smaller, high-rise condos: that’s where the “investor units” (aka Airbnbs) are. But it’s also where people feel less comfortable living during a pandemic, with shared spaces and building density being a factor. In an interview with CTV News, long-time landlord Mathew Diamond says low-rise triplexes and duplexes without lobbies and elevators have not seen the same price drops or surge in supply. In fact, it seems to be quite the opposite.
“Low-rise landlords who have private entrances, backyards and no elevators are a strong, very in-demand alternative to large buildings with a higher density of renters," he says.
However, if you’re looking for a more affordable apartment (and you’re okay with masked, physically-distanced elevator rides), you can definitely save some cash or get into a nicer place for less by moving into a high-rise.
Sitting on the fence and waiting for the market to drop even further?
Sure, prices could certainly get lower as landlords get more desperate. But they may not. Keep in mind that once “normal life” starts up again, demand will follow: these prices probably won’t last forever.
If you’re looking to make a move and maximize your savings. contact a Condo Pro for help finding the best options out there, including the ones that come with an incentive or two!