Rental Prices Trends in Toronto
One of the key Toronto rental market trends in 2021 is rental prices falling to the lowest level seen in recent years.
Since last year, the market has shifted in the opposite direction. In fact, the city has seen a rental rate decrease of 20.4% for a one-bedroom apartment and 17.5% for a two-bedroom apartment over the past year. It is also predicted that rental prices will keep sliding until at least the middle of the year. This is predominantly seen in condos across the city, though apartments and houses have also seen a big dip in rental prices.
The pandemic is a key factor contributing to this market phenomenon. With so many people now working from home, a more adequate space is needed to be able to set up a comfortable home workspace. This means that many Torontonians are looking to move, or have already moved, out of smaller rentals and into a larger space where they can set up a home office. Moreover, for nearly a year, the need to be close to downtown to reduce commuting time has not been as much of a necessity. People have been departing the downtown core for larger spaces in other areas of the city, or leaving the city entirely, to capitalize on lower rents for larger spaces.
To adapt to lower rental rates and higher rental supply, many property owners and managers have had to rethink their strategies to get tenants in the door. Running promotions and offering incentives have become more common practices among Toronto property owners to help renters cut down on moving costs and to keep rental units competitive. In addition, the city of Toronto recently approved a plan for placing a tax on vacant rental homes to encourage more rental opportunities and to help increase the number of affordable rental units on the market. As this comes into play, property owners will likely continue to see competition increase, with rental rates remaining on the low end of what has been seen in recent years.
Toronto rental rates are still high compared to other cities across the country, but are substantially lower than they were at this time last year. In fact, for the first time in years, Vancouver is the most expensive city for renters.