Covid 19 and Rental Apartments

REMI - Erin Ruddy

Uncertainty rules Canada’s rental market as the novel coronavirus continues to spread, forcing business closures and stay-at-home orders to persist beyond initial forecasts. Although it might be too early to assess COVID-19’s true impact on the rental-housing sector, March listings data from combined with new data from Urbanation and Altus Group indicate that some rent decline is likely, but it won’t be overly significant.

Variables include: job lay-offs; pay cuts; rent deferrals and delinquencies; the inability to change residences; school closures; and would-be home buyers choosing to keep on renting in light of the ongoing pandemic. Add in fewer evictions per government decree, less immigration, fewer students starting new jobs, and more young adults moving back home with their parents, and the uncertainty of the coming months escalates even further.

Rental-housing analysts agree that with the market “not operating normally” since the beginning of March,

“With the national economy partially on pause, a significant portion of tenants have been laid off or unable to work. They will not be looking for apartments, and in many cases won’t be able to pay their current rent,” observes Ben Myers, president of Bullpen Research & Consulting. “Our expectation is that rental rates will decline in the coming months, but some of that decline will not be captured due to a big increase in upfront incentives.”

Given housing demand is heavily tied to job growth, it’s not surprising that fewer people are buying houses as lockdowns persist across the nation. Data from Statistics Canada’s March Labour Force Survey (conducted during the week of March 15 to 21, 2020) shows a decline of more than a million jobs in March compared to February, with part-time jobs taking a bigger hit than full-time jobs (down 16 per cent and three per cent, respectively).

With fewer people buying homes and more continuing to rent, Altus Group predicts the multi-residential sector will remain relatively stable and opportunistic in the coming months, but may face medium-term challenges with deal closures, leasing disruptions due to economic and employment uncertainty, and delayed building completions or renovations.

Within the 72 purpose-built rental buildings completed since 2005, the average surveyed rent for available units was $2,481 per month. The vacancy rate averaged 1.0 per cent, rising slightly from 0.8 per cent a year earlier.

But, as Shaun Hildebrand, President of Urbanation points out, Q1 was made up of two distinct phases: pre-COVID-19, accounting for January through the first half of March; and post-COVID-19, accounting for the remaining two-week lock-down period.

“As rental demand declines as job losses mount, incomes are reduced, and immigration shrinks, the slowing in the GTA rental market that appeared in the last half of March will progress for at least the next few quarters given the current economic outlook,” he says. “The impact on rents will be something to watch, which will also be influenced by the timing of the record number of units that were expected to complete this year.”

According to both and Urbanation data, COVID-19 has led to an increase in long-term rental listings in March. With tourism and business travel having ground to a halt, both groups speculate that owners of previously furnished Airbnb units are repurposing them for long-term rental use. data shows a month-over-month increase in March listings of above 12 per cent.

Meanwhile, the number of page views for rental listings and online portals has increased in six of the seven major provinces in Canada. says part of the reason is that potential tenants no longer have the ability to enter the units for an in-person tour, leading to a surge in virtual viewings.

“Despite the global pandemic, we still experienced an increase in search activity on in March,” says Matt Danison, CEO of “Even with financial uncertainty, people with stable employment will be looking for deals in many of the markets that were strong before the COVID-19 crisis.”




Building Construction UP in February 2020

Statistics Canada

Total investment in building construction increased 1.3% to $15.9 billion in February, the fourth consecutive month-over-month growth. Gains were reported in all components of residential and non-residential investment. On a constant dollar basis (2012=100), investment in building construction increased 1.1% to $13.0 billion.

Investment in residential construction rose 1.4% to $10.7 billion in February. Investment in single-unit construction increased 1.9% to $5.2 billion. This rate of growth surpassed that observed in the multi-unit component (+0.9% to $5.6 billion), partially due to major projects in the Vancouver area. Multi-unit gains in British Columbia outweighed declines in seven other provinces.

The commercial component represented the majority of growth in the non-residential sector, up 1.5% to $3.0 billion nationally. Ontario (+2.7% to $1.1 billion) and Quebec (+3.5% to $650.4 million) contributed the most to the gains, which more than offset the declines reported in six provinces.

Meanwhile, investment in construction for the industrial (+1.0% to $937.9 million) and institutional (+0.6% to $1.2 billion) components also increased month over month.

Extracts for Opening Statement Bank of Canada April 16/20

The Canadian economy is experiencing a significant and rapid contraction. The shock is a global one, affecting all countries, but commodity-producing countries like Canada are being hit twice. Beyond the impact of the necessary public health measures to contain the virus, the economy is also being hurt by the plunge in world oil prices.

We have taken a number of steps to ensure financial institutions have ample liquidity so Canadian businesses and households can continue to have access to credit to meet their basic needs and bridge this difficult period.

These steps include enhanced repo facilities—which allow banks and other primary dealers to borrow cash from us by using their assets as collateral—in order to help them better manage their liquidity risks. We have expanded the list of institutions that can access our lending as well as the types of collateral they can pledge, and these facilities can now provide funding for up to 24 months. We have started a contingent term repo facility, which offers liquidity to a broader range of counterparties that are active in the repo market. Further, we have established a program to buy Canada Mortgage Bonds—up to $500 million per week. This is to support the healthy functioning of an important market for mortgage lending to Canadians. Together, all these facilities should improve liquidity and funding conditions for lenders, which will help companies and households have access to the credit they need. It will also help them benefit more from our monetary stimulus during the recovery period.

To support Canadian businesses, we started a program to buy bankers’ acceptances, which are a key source of financing for many small and medium-sized companies. We also began the Commercial Paper Purchase Program, which provides financing for a wide range of businesses and public authorities. And yesterday, we announced a program to buy $10 billion of high-quality corporate bonds in the secondary market.



140 Springhurst Avenue – Toronto – SOLD $5,950,000 / $146,250 per suite / 4.4% Cap Rate

This is a property located in Parkdale and comprises a walk up rental apartment building with 20 suites.  Built in 1959, this building contained mostly smaller 2 bedroom suites.  The property was not fully exposed and sold direct form private investor to private investor.  The price per suite is considered very low for this type of property and perhaps there were other issues with it we do not know of.

23 Harmony Road South - Oshawa – SOLD $11,240,000 / $351,250 per suite / 4.0% Cap Rate

This is a collection of 32 condo titled townhouses in northeast Oshawa.  All the suites are three storey with full basements and geothermal heating and cooling.  There are 3 and 4 bedroom models and 75 surface parking spaces.  Tenants pay all utilities and all the suites have been renovated to a high standard.  The property was fully marketed and purchased by a private investor who is also a realtor.

3443 Bathurst Street – North York – SOLD $14,500,000 / $630,435 per suite / 3.75% Cap Rate

This property is located along Bathurst Street south of Highway 401 and is on a corner.  This is a six storey condo titled rental apartment building with a total of 23 suites and was built in about 10 years ago and always run as a rental building.  This building has elevators, under ground parking and the suites are over 1,500 sf on average.  There are a collection of one, tow and three bedroom models. This property was fully marketed and owned by a private REIT and it sold to a private investor.

600 Eglinton Avenue West – Toronto – SOLD $17,800,000 / $296,600 / 2.85% Cap Rate

This property was owned by a long term apartment building investor and comprises a 60 suite rental building built in 1954.  It is 6 stories in height and has 48 underground parking spaces and elevator.  Heating is gas fired hot water and hydro is metered separately with tenants paying their own.  This property is located in a highly desirable area know as Forest Hill and comprised of bachelors and one bedrooms suites.  Rents were far below market.  The property was fully marketed and purchased by a private investor and the price in our opinion was great value for the buyer.




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