continued from page 24
“Rental demand has plummeted in Toronto as tenants stay in ... “ COVID-19, most people don’t want to look for an apartment during the pandemic nor do they want to open up their apartment for viewings. This has limited the availability of rental units to some degree, but there are also fewer people searching for rental units.
condo owners wanted to live close to downtown amenities and public transit. However, being forced to live in the same space for a long period of time, as well as having to share elevators and building amenities with strangers, has potentially changed their preferences.
With many people losing their jobs or facing reduced wages, a significant number of tenants do not have the income or funds to move up or out. Average rents for new rentals have not declined enough compared to tenants’ current rents to warrant a move. As a result, there have not been significant changes in turnover and vacancies.
Some experts think condo owners and renters are going to start moving out of densely populated areas and city centres. Being close to amenities will be less important than having space and separation from neighbours. There has already been a spike in short-term rentals in suburban and rural areas, according to data from AirDNA, which provides data and analytics from short-term rental sites. People with the means to do so have sought refuge in cottages and rural areas, and some people will make the move on a more permanent basis when possible. With companies enabling employees to work from home, this might become a more permanent trend, so living close to public transit will not be as important as it once was.
“Rental demand has plummeted in Toronto as tenants stay in their current accommodations for fear of exposing themselves to COVID-19,” said Matt Danison, CEO, Rentals.ca. “And, unemployment has soared with the pandemic lockdown, reducing move-up, move-down movement.” However, this could change quite rapidly, as the lockdowns ease and people are freer and more comfortable about moving. According to Guy Tsror, a data scientist at Local Logic, the rental market lost 27 per cent of user search traffic at its lowest point in March. However, near the end of April, search traffic rebounded to levels exceeding those seen in January. “Rentals.ca has experienced its all-time high in traffic numbers in the first week of May, surging 59 per cent compared to the first week of April,” said Danison. “Renters who put off moving when the pandemic hit are now starting to resume their apartment search in the hopes that Canada’s lockdown will end in the coming weeks.”
Changing preferences COVID-19 has done more than affect the economy – it has also affected how people have had to live and want to live. Of course, people either could not or did not want to move during the pandemic. Some people had to stay home because they were either infected with the virus or had potentially come into contact with someone who was infected, forcing them to self-isolate for 14 days. The pandemic has influenced people’s preferences and priorities. Prior to COVID-19, renters and
26 | July 2020
Fallout from the condo rental market While there are condo rentals available in many Canadian cities, the impact of COVID-19 on this market is most apparent in the Greater Toronto Area. There is a clear divide in the numbers before and after the pandemic shutdown. According to Urbanation, total lease transactions in the GTA condo market grew 16 per cent year over year during the first quarter to a record high. However, in the first two weeks following the shutdown in mid-March, lease volume was down 25 per cent compared to the same time last year, and was down 39 per cent compared to the first half of March. Looking at just the first two weeks of May, condo lease activity was down 43 per cent year over year. The number of leases during this two-week period is also more than double the number of resales. On the other side, there has been a 7 per cent increase in the number of new listings year over year during the first half of May. More condo projects have reached readiness for occupancy and former short-term units arrived for lease in the long-term market. There was also a 29 per cent increase year-over-year in furnished long-term continued on page 28