For the first time in years, rental rates have come down in Toronto and Vancouver, Canada’s most expensive cities, because of the coronavirus pandemic.
According to a report released Thursday by rental site PadMapper, April is when the effects of the COVID-19 pandemic really affected prices.
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In Toronto, average one-bedroom rent in April dropped 2.2 percent to $2,200 and two-bedroom rent fell 4.1 percent to $2,830 compared to March.
Last month the average one-bedroom rent in Vancouver dropped 2.3 percent (compared to March) to $2,100 but the average two-bedroom rent remained $3,000, unchanged from the previous month.
Montreal, whose downtown rental market is among the tightest in the country, saw the largest monthly decline in Canada as average one-bedroom rents fell 5.2 percent to $1,470 in April. Two-bedrooms were 2.6 percent cheaper at $1,850.
An increase in the number of available rental units combined with a decrease in demand for rentals during lockdowns explain the sudden reversal.
In an email to VICE, PadMapper analyst Crystal Chen said the market has slowed to halt in some cities, forcing rent prices lower. “Landlords in shelter-in-place cities have removed their listings until a time when they can show them again and tenants are cancelling their move outs so landlords are taking these planned vacancies off the market,” she said.
Chen says this gives renters an edge. “If landlords want to fill vacancies they will either need to price down their units or offer incentives, like a month or two of free rent with a 12-13 month lease,” she said.
Much of this flood of new supply are units that used to be short-term rentals on Airbnb and Craiglist and are now available on the long-term rental market. Ontario and Quebec have banned short-term rentals for anyone other than essential workers who need to self-isolate.
A report Wednesday by real estate platform Rentals.ca said that although it doesn’t include furnished or short-term rentals in its research, it’s likely that the owners removed furniture and listed their properties as long-term rentals. Rentals.ca spokesperson Paul Danison told VICE that in April listings for Toronto apartments increased 10 percent from the previous month. For comparison, the number of rental and condo apartment listings on Rentals.ca in Toronto declined by 34 percent monthly in March 2019.
Although Canada’s most expensive markets saw dramatic changes, most cities didn’t see big changes in rent prices. And some cities became less affordable with higher average prices for one bedrooms month-over-month, in the midst of the coronavirus pandemic, including Quebec City (climbing 4.9 percent), and Windsor (up 4.6 percent) and Hamilton (a 3 percent jump) in Ontario.
Chen says rents in Quebec and Windsor are among the cheapest in Canada and prone to large percentage moves. She said Hamilton prices increased because it’s close to Toronto and people priced out of that market are choosing Hamilton instead.
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