Pandemic Continues To Put Downward Pressure On Rental Market In Most Cities Across Canada

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Average Rent Declines 1.4% Monthly In Canada 

Guelph rents down slightly month over month in May, report says  

COVID-19 pandemic continues to put downward pressure on rental market in most cities across country.

The average monthly asking rent for all property types in Canada was down 1.4 per cent in May over April to $1,814, according to Rentals.ca and Bullpen Research & Consulting which produced the latest National Rent Report. 

Guelph finished 19th for average monthly rent in May for a one-bedroom home at $1,435 and 22nd for average monthly rent for a two-bedroom at $1,612. Rents for a one-bedroom and a two-bedroom in Guelph were down slightly month over month in May.  

Kitchener finished 20th on a list of 34 cities for average monthly rent in May for a one-bedroom home at $1,428 and 23rd for average monthly rent for a two-bedroom at $1,600. 

Rents increased in Kitchener monthly for a one-bedroom by 3.3 per cent and for a two-bedroom by 3.5 per cent. Annually, rents were also up in the city by 17.5 per cent for a one-bedroom and 10.4 per cent for a two-bedroom. 

Waterloo came in 24th for average monthly rent in May for a one-bedroom home at $1,1,297 and 20th for average monthly rent for a two-bedroom at $1,693. 

Toronto rents have declined the last three months -- May, April and March -- in a turnaround from many months of increases, according to the listings data on Rentals.ca. 

The COVID-19 pandemic continues to put downward pressure on the rental market nationally, with rent down 7.2 per cent from the peak in September at $1,954 per month. 

“Tenants have been more dramatically impacted by pandemic-related job loss than homeowners, and are not currently looking for apartments or other rental accommodation,” said Ben Myers, president of Bullpen Research and Consulting. “This sharp drop in demand has resulted in landlords dropping their asking rents in most major markets across the country.” 

The average rent for apartments and condominium apartments in Toronto (former city boundaries, before amalgamation) declined by 0.5% in May to $2,290 per month, which follows the 5.9% monthly decline in April. Rents were also down in Winnipeg, Montreal and Victoria. 

But rents for apartments and condominium apartments in London were up 2.9 per cent in May and up 1 per cent month over month in Edmonton after both cities had declined 11 per cent monthly in April.

“There was a significant increase in website traffic on Rentals.ca in May,” said Matt Danison, CEO of Rentals.ca. “It appears prospective tenants are doing their research to prepare for a move in the near future.” 

Toronto led all 34 cities on the list for average monthly rent in May for a one-bedroom home at $2,103, and for a two-bedroom at $2,650 (all property types). Nine areas of the Greater Toronto Area finished in the top 10 for most expensive rent for a one-bedroom home in Canada. 

Richmond Hill finished third on the list with average monthly rent in May for a one-bedroom home at $2,003 and average monthly rent for a two-bedroom at $2,389. 

Etobicoke came in fourth with average monthly rent for a one-bedroom at $1,988 and average monthly rent for a two-bedroom at $2,350.

Average monthly rent for Etobicoke for an apartment and condominium rental decreased 3.3 per cent to $2,158 May over April. 

Markham finished fifth with average monthly rent in May for a one-bedroom home at $1,973 and seventh for average monthly rent for a two-bedroom at $2,267. 

Mississauga came in sixth on the list with average monthly rent in May for a one-bedroom home at $1,940 and eighth for average monthly rent for a two-bedroom at $2,129. 

Average monthly rent for Mississauga for an apartment and condominium rental decreased 3.3 per cent to $2,072 month over month. 

North York finished seventh with average monthly rent in May for a one-bedroom home at $1,928 and sixth for average monthly rent for a two-bedroom at $2,299. 

Average monthly rent for North York for an apartment and condominium rental decreased 4.0 per cent to $2,083 month over month. 

Vaughan came in eighth on the list with average monthly rent in May for a one-bedroom home at $1,922 and fifth for average monthly rent for a two-bedroom at $2,317. 

Burlington finished ninth with average monthly rent in May for a one-bedroom home at $1,787 and 13th for average monthly rent for a two-bedroom at $1,970. 

Scarborough came in 10th on the list with average monthly rent in May for a one-bedroom home at $1,726 and 12th for average monthly rent for a two-bedroom at $1,977. 

Average monthly rent for Scarborough for an apartment and condominium rental decreased 1.4 per cent to $1,881 May over April.

Brampton finished 12th with average monthly rent in May for a one-bedroom home at $1,676 and 14th for average monthly rent for a two-bedroom at $1,903. 

Renter preferences on where to live are difficult to predict since the onset of the COVID-19 pandemic, but working from home could be having a small effect in some cities. 

Local Logic, which covers data on a number of Canadian real estate portals, found that in the Toronto and Vancouver Census Metropolitan Areas (CMA) there was a slight decrease in the share of transit-friendly searches in May. 

But in the Montreal CMA, transit friendly searches increased on a percentage basis to nearly one-quarter of the searches. (The Montreal CMA has fewer car-centric greenfield suburban areas in comparison to the Toronto and Vancouver CMAs).

From further Local Logic data, Canadians looking to live in metropolitan areas, have started looking outward away from city centres. 

“We captured an increase of 24 per cent in commute distances by car in Montreal,” said Guy Tsor, data scientist at Local Logic. “And a 19.7 per cent increase in Toronto in a span of just two months from users looking for a new house or apartment.”

“Toronto searchers who use public transit have shown a 33 per cent increase in how far they are willing to commute compared to March,” said Vincent-Charles Hodder, CEO of Local Logic. “Possibly because of the pandemic, people are now willing to live a bit farther out of the centre, to avoid higher density areas.” 

Other takeaways from the June National Rent Report include:

  • Condo apartments experienced the steepest decline, with average rents offered by these private investors fell by 9.4 per cent year over year. Rental apartments, which were growing by 4 per cent annually in January (and more than double that in November of last year), fell into negative territory in May, declining by 3.5 per cent annually from $1,522 per month to $1,468 per month.   
  • The average monthly rental rate in Ontario was down 0.6 per cent monthly, while Saskatchewan was down 1.1 per cent and Quebec was down 1.9 per cent. But rents increased in May over April in Alberta, Manitoba and British Columbia.
  • Homebuyers insured by the Canada Mortgage and Housing Corporation (less than 20 per cent down payments), can no longer borrow their down payments, and must have a credit score of 680 or above. Even if house prices decline and tenants are enticed to buy, they might not qualify for a mortgage with CMHC insurance. This will reduce ownership demand, and increase rental demand. 
    Despite the pandemic, tenants are still looking at apartments. The pageviews on the listings on Rentals.ca analyzed in this report have increased for the third consecutive month.
  •  Per-square-foot rent for units from 400 square feet to 800 square feet have declined by 8 per cent to 14 per cent annually in Canada, while units from 900 square feet to 1,500 square feet have declined by between 3 per cent and 8 per cent annually. 
  • Vancouver finished not too far behind Toronto in second with average monthly rent for a one bedroom home at $2,022 and average monthly rent for a two-bedroom at $2,552. Red Deer was the most affordable city on the list for renters with average monthly rent for a one-bedroom home at $892 and average monthly rent for a two-bedroom at $931.

The National Rent Report charts and analyzes monthly, quarterly and annual rates and trends in the rental market on a national, provincial, and municipal level across all listings on Rentals.ca for Canada.

 

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