This pandemic has changed all the rules of all the games and of course, the impact of COVID-19 on real estate is notable by everyone. Torontonians are not only re-evaluating how and where they want to live—they’re also considering how far their dollar and influence will stretch in the current housing landscape.

Because renters are typically not also sellers, it seems that the rental market has shown the most notable changes. Where great rental units have been few and far between for a decade or more, landlords have long held all the cards, but dramatic changes have brought about a circumstance that hadn’t been seen in a decade: the return of a renter’s market.

In the first quarter of 2020, rents were going up across the city, then COVID hit and they began to decline. Suddenly moves were being cancelled, schooling arrangements changed, and the typical influx of new citizens looking to settle in Toronto, slowed to a crawl. People were being especially economically conservative and with more options and fewer renters looking for units, prospective tenants were spoiled for choice. Adding to the landscape of option, short-term accommodations began to flood the long-term rental market as not only were fewer people looking to holiday in the city, new Airbnb regulations completely halted the short-term market.

The dynamic had shifted. In downtown Toronto, the number of former bnbs listed for rent grew by 80%, the condo rental price dropped 6% and the number of condos that were leased declined by 25% in the same period. Landlords lowered rents to stay competitive with the dwindling numbers of prospective tenants who once had stiff competition, but were suddenly able to stay on budget and check off more items on their wish lists.

Looking ahead, no-one knows how the Covid pandemic will resolve, but currently the news is a-ok. On one hand, absentee or lackluster landlords are struggling to get up to speed and that’s a good outcome for cleaning up a sector that a few bad apples viewed as an easy rent cheque. On the other, we’ve seen that professional, hands-on landlords are successfully competing in healthy ways, cultivating various rental perks to make their offering stand out. With this being said, the current MO across the board is: if you have good tenants, keep them at all costs.

Strangely, the unanticipated impact of Covid has resulted in a renters’ market that is more balanced, with greater opportunity for fair pricing, more options for finding a good fit, and a better balance of power in the transaction.

Hi, I’m Jen

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