Toronto Star

Down­town’s lux­ury condo rental mar­ket takes big hit

Prices fall at least $100K af­ter drop in de­mand and mi­gra­tion of fur­nished Airbnb suites

- TESS KALI­NOWSKI REAL ES­TATE RE­PORTER

Condo rents in some of Toronto’s toni­est down­town neigh­bour­hoods are feel­ing the ef­fects of COVID-19 with the big­gest im­pact on larger and lux­ury units, ac­cord­ing to a new re­port based on list­ings at Rentals.ca. The rental re­port was re­leased Wed­nes­day, the same day real es­tate bro­ker­age Zoocasa pub­lished an anal­y­sis of me­dian sell­ing prices for condos dur­ing the pub­lic health emer­gency.

The Zoocasa anal­y­sis found that prices fell by at least $100,000 in two cen­tral Toronto neigh­bour­hoods — the Re­gent Park/St. James Town area de­fined as C08 in the Toronto Re­gional Real Es­tate Board’s Mul­ti­ple List­ings Ser­vice (MLS) and the Mount Pleas­ant East area, C10 on MLS.

On the rental side, the King Street West area from about Yonge Street to John Street, with the M5H postal code, saw the largest month-over-month de­cline in rents per square foot in April — down 12.6 per cent, com­pared with March.

In the M5R postal code area that cov­ers the An­nex and Yorkville, the aver­age rent per square foot fell 9.4 per cent in the same pe­riod.

The study shows condo rents in wa­ter­front neigh­bour­hoods, the En­ter­tain­ment District and the Dis­tillery District have dropped be­tween 2.2 per cent and 8.2 per cent per sq. ft. in April com­pared with March.

It’s a sit­u­a­tion that could have longert­erm im­pli­ca­tions, said the re­port’s author Ben My­ers of Bullpen Re­search and Con­sult­ing. The high cost of in­vest­ing in a condo, cou­pled with down­ward pres­sure on rents could make it more dif­fi­cult for in­vestors to carry their units.

“If rents are go­ing down, there’s a chance prices will be go­ing down as well,” he said.

“A ma­jor­ity are buy­ing be­cause (condos) have been go­ing up in value. But at some point, you’re los­ing a lot of money on a monthly ba­sis so that it no longer be­comes worth it,” he said.

My­ers cites fall­ing de­mand for apart­ments as renters stay put and un­em­ploy­ment spikes, trends ev­i­dent in the re­sale hous­ing mar­ket where sales have dropped about 70 per cent dur­ing the COVID-19 cri­sis.

“Maybe peo­ple who were think­ing about mov­ing down­town are ner­vous be­cause of the den­sity and the amount of peo­ple down there, the lack of gro­cery

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