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After two years of the pandemic, people are returning to the City of Toronto.IMAGE OF THE GEORGIAN COURTESY OF STAFFORD DEVELOPMENTS

The story surrounding the spring condo rental market in the Greater Toronto Area (GTA) is much like that of the buyers’ and sellers’ real estate market in the region: A tight inventory squeeze is pushing up prices.

According to the latest Toronto Regional Real Estate Board (TRREB) condominium rentals statistics, released on March 2, total new listings in Q4 2021 were down 48.9 per cent year-over-year (at 16,972, compared with 33,187 in Q4 2020). The average one-bedroom apartment rental price was up 13.8 per cent in Q4, year-over-year (at $2,099, compared to $1,845).

What are brokers seeing on the front lines?

“One of the biggest things picking up the past few months comes down to the 1+den units where the den is usable as a second bedroom,” says Kimberly Sears, director of Menkes Rental Suites Management Inc. for Menkes Developments Ltd. In many cases, she adds, these attract families that are trying out neighbourhoods, family-friendly building amenities, or school districts by renting first before deciding whether to buy.

“In midtown buildings we are getting a lot of this, and now we’re starting to see it in the downtown core ones, too,” she says.

That mass exodus during the height of the COVID-19 pandemic, when people were looking to move out of dense, urban areas, is now reversing. Sears says the market is on track to see a return to pre-pandemic vacancy and pricing levels heading into spring and summer. The typical cycle sees spring as a period of market uptick, with the height of the market stretching through August and September. Sears says she has seen a six-per-cent increase in prices for a one-bedroom condo compared with six months ago.

Amenities are a big draw for renters now, Sears says.

“You can’t just have your basic party room and think that’s going to appease people,” she says. A children’s playroom, which Menkes is offering at such projects as The Eglinton and Harbour Plaza Residences, is an example of these extra, coveted amenities.

One of the biggest things picking up the past few months comes down to the 1+ den units where the den is usable as a second bedroom. In midtown buildings we are getting a lot of this, and now we’re starting to see it in the downtown core ones, too.

Kimberly Sears, Director of Menkes Rental Suites Management Inc. for Menkes Developments Ltd.

Further accelerating the moves back to the city is the increasing preference to avoid commutes, especially with gas prices skyrocketing.

“Over the last two years, people tried something new,” Sears says. “They went to the country or to the suburbs. They went to the backyard. They did gardening. They drove every day back and forth, or once a week, to the office. Now two years later, I think that is wearing off. It’s not just students going into condos now; it’s becoming a family thing.”

Janice Fox, broker of record for Hazelton Real Estate Inc., is seeing this trend as well. A big push in terms of rentals in the downtown core comes from corporations ramping up their offices post-pandemic. And more professionals looking for places to rent are also driving the market, Fox says.

“There’s a shortage of inventory, like everything in the real estate market in Toronto,” she says. “If we were having this conversation a year and half ago in the heart of COVID, we would be having the opposite kind of conversation because the rental market was desperate for tenants, with dropping prices.”

There’s a big shortage of inventory in luxury segment condos and homes as well, Fox adds, even those over $10,000 per month. It’s never about budget with that segment of the market; it’s always about size.

Corporate rentals are coming back, with brokers getting more calls from international relocation services, and more people coming to Toronto on contract.

“It’s very hard to find something now that satisfies that, especially with high-quality furniture,” Fox says. “I think not only are we returning to whatever the previous normal was but I think prices everywhere are up and competition is going to be fierce.”


Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.