In case you haven’t been paying attention, among the significant repercussions COVID-19 has wrought is the softening of the Toronto rental market.
For the first time in years, average rents have consistently fallen over the last five months, with the average 1-bedroom dropping approximately $250 per month since the beginning of the year. The reasons for the market’s softening are many, and nuanced, but can generally be focused into a pair of main factors:
- There is more supply of rental units in the city’s core than has been seen for years. This is matched by a drop in demand, as movement into the city by people such as immigrants, foreign students and out-of-province workers has all but frozen.
- At the same time, large numbers of condo units formerly listed on Airbnb or as short-term rentals have been converted to long-term rentals with tourism frozen and owners needing income. This is in addition to construction continuing on many buildings.
Like all matters of the economy, supply and demand play the largest role; simply put, Toronto currently has more rental units available than it has renters who need them. A situation the historically low-vacancy city has not had to deal with in decades. (Just two years ago at this time Toronto had a vacancy rate of 0.3%, while in Q2 2020 it has reached 1.8%, the highest since 2015 when research firm Urbanation began tracking the data.)
In response to this reality, dozens of rental apartments throughout the city are now offering discounts and incentives for those willing to move in.
Examples of these incentives (courtesy Rentals.ca) include, but are not limited to:
- No last month’s rent necessary upfront + $250 move-in bonus
- 1.5 months free and move-in bonus of $500
- $500 move-in bonus if you rent by July 31st
- $350 move-in credit when you sign your lease within 24 hours
- First month’s rent free
- 1 month free and move-in bonus of $500
- 6 months of free parking
And these incentives aren’t limited to a few buildings in one specific area of the city, no, you’ll find discounts strewn across Toronto, from Downtown to Midtown, North York to East York, and Scarborough all the way across to Etobicoke – each area has multiple buildings offering incentives for you to sign up to spend the next 12 months there.
So, while the resale market certainly doesn’t seem to be offering anyone a ‘COVID discount’, the rental market is certainly trying its best to woo you. And in a city known for high rents and low vacancy rates, we suggest you take the bait while you can – it likely won’t last long.