Anita Balkrishnan, The Canadian Press
Posted on Monday, 18 January, 2021 13:17 EST
Last Updated on Monday, 18 January 2021, 13:20 EST
A new report claims that the vacancy rate in rental apartments in Toronto peaked in the fourth quarter of last year.
Urban said yesterday (Monday) that a survey of newer rental apartment projects completed in the city of Toronto since 2005 reported a vacancy rate of 5.7 percent in the fourth quarter of last year, compared to 1.1 percent in the fourth quarter of 2019.
The consulting firm said the rate is at a 50-year high when examining Canada’s mortgage and housing survey data for Toronto as early as 1971.
“I think these results speak to how much the pandemic (COVID-19) has drastically changed the rental market in Toronto,” said Sean Hilbrand, president of Urbanish.
“Demand was lost due to an increased population influx into the city. We had low immigration, high unemployment, a sharp decline in the number of post-secondary students. And at the same time, last year, in 2020, we completed a record number of new condominiums.”
The Urbanation report said the overall vacancy rate in the Greater Toronto Area was 4.6 percent in the fourth quarter of 2020, compared to 1.0 percent a year earlier, as vacancy rates in Area 905 in the Greater Toronto Area rose to 2.0 percent in the quarter compared to 0.8 percent in the fourth quarter of 2019.
Average rents for units for rent in Toronto during the quarter fell 10% year-on-year. The annual decrease in average rents in Area 905 was 2.2 percent.
“This report looks at newer rentals designed for use … and also apartment rentals, which are really the more expensive types,” Hildbrand said.
“All the data show that more and more young workers, contract workers, have suffered the worst job losses in 2020. They tend to have a higher representation in the rental market. And it makes sense that they would walk away from renting at higher prices.”
The urbanization report stands in contrast to the vacancy rates in Toronto towards 2020, before the COVID-19 epidemic. Of the requested rents charged for vacant units are about 25 per cent. High compared to that of occupied units. “Both Vancouver and Montreal had vacancy rates below two percent before the plague began, according to CMHC.
“I think we’ll go back to that scenario,” said Hildbrand of the Toronto market. “As vaccinations increase, we expect to eventually see higher levels of increase. We will see better population growth for the city of Toronto. The unemployment rate will fall. Workers will return to the office, students will return to the office. Return to classroom learning.”
Urbanization does not report other areas across the country, but a separate report from Rentals.ca indicates that rental rates are declining across Canada – although there are exceptions.
Rentals.ca reported that the average rent for all of the Canadian properties listed on its website stood at $ 1,750 per month in the fourth quarter, a decline of eight percent over the same period in 2019. For the entire year, national rental rates were observed. 5.7 percent to $ 1,794 per month.
The Rentals.ca report suggested that rental rates recorded in Vancouver have dropped by 6.7% in the past year, while Montreal rates have risen by 5.2%. However, in some cities, such as Gatinho, Kitchener and Hamilton, rates have risen by between 15 and 15 percent. 22 percent in 2020, according to Rentals.ca.
Hildebrand pointed to an up-to-date set of statistics from Canada that said Toronto, Montreal and Vancouver grew more slowly from July 1, 2019 to July 1, 2020, as people moved to fast-growing suburbs like Oshawa, Unt., Farnham, Kew. ., And New Westminster, BC
“Certainly the plague accelerated the flow of that population,” Hildebrand said. “People worked from home because they were looking for cheaper rent.”
This report from the Canadian press was first published on January 18, 2021.