The Big Toronto Condo Rental Comeback
But over the past 4-8 weeks, we have been seeing renewed additional demand from students who plan to attend their university/college classes in person once again this fall.
When looking at the number of new rental listings coming onto the market,we can see that rental listings are down year-over-year, but are up significantly above the listing volumes in 2018 and 2019.
The year-over-year decline in new listings is due to the fact that condo rental listings surged just after the initial COVID lockdowns in March 2020 as tenants moved out of the city.
But as I mentioned earlier, the more important trend was that the ratio of leased condos vs. new condo rental listings was trending up since the second half of 2020, suggesting that demand for condo rentals was starting to outpace the supply of new listings.
Despite that, inventory levels for condo rentals remained stubbornly high until November 2020 when they peaked at just under 3 MOI before beginning to trend down. In July 2021, there was just 0.5 MOI – a sign of a very competitive market.
This tightly supplied market means we have started to see more tenants competing for the same rental unit, leading some tenants to offer a price that is above the landlord’s asking price. When we look at the percentage of rental units that were leased for more than their asking price, we can see this surge from 6% in March 2021 to 24% in July.
This has also pushed average rent prices up from $2,045 in February to $2,334 in July.
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