Toronto accounts for one-third of Canada's $150 million in rental property arrears

  1/29/2021 |   SHARE
Posted in Rental Market by Ron Hyde| Back to Main Blog Page

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Nearly 11 per cent of Toronto-area rental households — 34,857 — were in arrears last fall, the highest rate among 17 Canadian urban areas surveyed in October by Canada Mortgage and Housing Corp.

The $55 million in unpaid rent in the Greater Toronto Area represents more than a third of the country’s $150 million in outstanding payments, according to the annual Rental Market Survey released Thursday.

The 2020 survey is the first in which the CMHC — prompted by the pandemic — has included rent arrears as well as vacancy rates and rent costs.

The region’s arrears rate reflects Toronto’s relatively greater concentration of hospitality and service jobs occupied by workers who have been disproportionately affected by the pandemic, said CMHC analyst Dana Senagama.

“It’s not home ownership that’s really taken the hit this time, it’s been rental. It highlights this disparity where it’s impacting the people at the margins,” she said.

Despite a 14-year high vacancy rate of 3.5 per cent in purpose-built rentals — up from 1.5 per cent a year earlier — affordability continued to be a challenge for tenants. The survey showed that rents rose 4.7 per cent last year, compared to 6.1 per cent in 2019.

That is likely because the survey captured pre-pandemic rent growth that skewed the average up, said CMHC. Landlords may also have offered incentives such as lower deposits, breaks on parking and utilities or cash bonuses rather than lower rents to keep their units occupied.

The City of Toronto, which typically sees the highest rent growth, showed the lowest in the 2020 survey, because the industries hardest hit by the pandemic tend to be concentrated in the core, said the report.

The average rent was $1,523 with the most vacancies closer to downtown in the smallest units. Bachelor apartments showed a 5.5 per cent vacancy rate and average rent of $1,200. Two-bedrooms had only a 2.2 per cent vacancy and cost $1,837 on average.

CMHC found Toronto-area condo vacancies reached a five-year high of 1.7 per cent, up from about .7 per cent from the last five years, said Senagama.

With a third of Toronto’s condos on the rental market, “that 1 per cent difference, in absolute numbers, is a significant increase,” said Senagama.

Between March 17 and Aug. 1, there were 6,770 applications processed to evict a tenant for nonpayment of rent. Ontario is now under its second eviction moratorium since the pandemic began, although the Landlord and Tenant Board is allowed to continue hearings and issue eviction notices.

Hamilton’s 3.5 per cent vacancy rate did not change in last year’s survey but rents rose 5.4 per cent to an average of $1,207 last year. Kitchener-Waterloo’s 2.1 per cent vacancy also remained unchanged. Rents there rose by 2.1 per cent to $1,221 on average.

Source: St Catharines's Standard

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