Posthaste: This snapshot of Toronto condo rental and sales shows staggering impact of COVID-19
Good Morning!
Deep in the glass and concrete condo forest of downtown Toronto there’s a shakeup going on.
A sharp drop-off in travel and tourism in Canada’s biggest city because of COVID-19 has walloped the market for short-term rentals such as Airbnb and the effects now appear to be rippling through the real estate sector, a new study shows.
A two-month ban on short-term rentals in Toronto was lifted June 5, but travel restrictions and fear of the virus mean that tourists are staying away and how long this will last remains uncertain. That has forced many short-term rental investors to consider switching to long-term rentals or putting their properties up for sale.
To get an idea of what impact this is having on condo investors and renters, online realtor Zoocasa looked at a snapshot of 10 condo buildings in downtown Toronto that permitted short-term rentals or were popular on Airbnb. The report, by Jannine Rane , found that new listings for long-term rent or sale in these buildings were “dramatically” higher than in the neighbourhoods where they were located and in the city overall.
The findings are staggering:
Overall Toronto new listings in June for condo rentals grew 83% from the year before with 6,845 units added to the market. In the Airbnb-friendly buildings that Zoocasa studied rental new listings leapt 257%, with 350 units listed in June compared to 98 last year.
One building, Ice Condos I & II on York Street, saw a 547% hike in new listings, with 97 units coming on to the market in June compared to 15 during the same time last year. The 97 units represent about 7% of the total units in the building.
Andrew Kim, a Zoocasa agent who works in downtown Toronto, said declining demand and steep climb in inventories are lowering condo rental prices.
Students were among the first to give up their rental leases early in the pandemic, followed by those who lost their jobs during the lockdown and others who no longer felt they had to live close to the office because of remote working, he said.
It’s a very different market than a year ago when rental vacancies were at a record low. “If you are a renter looking to move to the downtown area, now is the best time to take the leap if you can,” said Kim.
Some condo investors are getting out altogether. New listings for sale in the 10 buildings Zoocasa studied were up 108% in June with 131 units listed compared to 63 last year. Overall in Toronto, 3,315 condo apartments went on the market that month, a 36% increase from the year before.
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*EAT FOR ENGLAND,* a 15-foot high Spoon created by artist Bob Budd sits between two farmers fields in Cramlington, United Kingdom. The sculpture was commissioned in 2006 as part of a National Lottery funded art trail in Northumberland. Christopher Furlong/Getty Images
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· Melanie Joly, Minister of Economic Development and Official Languages, accompanied by Elisabeth Briere, Member of Parliament for Sherbrooke and Parliamentary Secretary to the Minister for the Economic Development Agency of Canada for the Regions of Quebec, will announce financial investments to support regional development in Trois-Rivieres, Quebec
· *Today’s Data:* U.S. new home sales, U.S. flash composite Purchasing Managers’ Index data for July
· *Notable Earnings:* Roots, Verizon, Honeywell International
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· Gold set for best week in more than 3 months on stimulus bets
· Alberta powers up hydrogen sector with three small-scale projects as part of plan to reduce emissions
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· How your Fitbit or Apple Watch may be able to detect COVID-19, even before symptoms start
· The bankruptcy of this retail conglomerate is the scariest one yet
· Hedge fund Lakewood is shorting one of Canada’s top stocks
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The personal finances of Canadians, though still fragile, appear to be improving. A new study by the Angus Reid Institute finds the percentage of Canadians saying their financial situation is “good” or “great” has risen seven points from early April, from 73% to 80%.
On the down side, one in five continue to say they are in “bad” or “terrible” shape. No matter what financial shape they are in more than half of those surveyed said the next 12 months is not an ideal time to make a major purchase.
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* Today’s Posthaste was written by Pamela Heaven (@pamheaven), with files from The Canadian Press, Thomson Reuters and Bloomberg.
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