2021 will bring lower rent in Toronto, while sale prices will keep rising

The latest Toronto housing forecasts predict rent to keep falling until mid-2021 and then to recover in 2022. At the same time, sale prices will probably keep growing.

According to report by the listings site TorontoRentals.com, rental prices are expected to go down by about $100 per month by mid-2021 from November’s $2,060.

The future vacancy tax in Toronto will support the decline, encouraging landlords to cut their rates, fill empty properties and soften the housing crisis.

Nevertheless, rental prices will start growing in late 2021. In 2022, they are expected to go up significantly by 13-14% to about $2,325, the report says. And still, it will be less than 2019’s peak average of $2,454 per month.

Last month, the average rent in Toronto was $2,060, which is 3.1% lower than in October and 16.4% lower than a year earlier. Average rents for one and two-bedroom homes fell by almost 15% on a year-over-year basis to $1,827 and $2,288, respectively.

In other words, tenants now can save $300-$400 on monthly rent compared to a year ago, and this amount may go up next summer.

Obviously, condo rents faced the largest decline in case of Toronto, with average prices in November falling by 17.7% from $2.560 to $2,110, annually. It means new renters can save $450 per month.

Meanwhile, the Canadian Real Estate Association (CREA) expects sale prices in Ontario to keep growing next year.

According to the CREA’s resale housing market outlook, the average home prices in Ontario will rise by 16.3% by the end of 2021.

The report says the average home price in Ontario will reach $708,377 by the end of this year, marking a 17.1% increase. The CREA believes low supply and strong demand will push the average price to $823,656 next year. However, the lack of supply may also limit sales in the province, while the rest of Canada will not face the same tendency.

The CREA expects national sales to go up by 11.1% annually to record 544,413 units this year.

The Association says the number will grow by 7.2% to 584,000 next year. The national average home price may end this year at $568,000, showing a 13.1% annual gain. In 2021, an increase by 9.1% to $620,404 is expected.