Condominiums in the City Place neighbourhood in downtown Toronto on Nov. 19, 2020.Fred Lum/The Globe and Mail
Short-term rental bookings continue to drop in Toronto as pandemic travel bans and new restrictions weigh on the industry.
In October, the number of available listings on Airbnb and Vrbo in Toronto was down 38 per cent from a year earlier, according to AirDNA, an analytics company that tracks the industry. The number of listings booked for at least one night last month was down 63 per cent from August, 2019, the peak of activity last year.
As a second wave of COVID-19 grips the city, more weakness is likely. “This winter could be worse than those in the past since usually there are more business travellers in the winter months,” Jamie Lane, vice-president of research at AirDNA, said in an e-mail. “This year, with companies still restricting travel for their workers, that demand may not materialize.”
The short-term rental industry is undergoing a big shift in Toronto. Before the pandemic, there had been a multiyear surge of listings – along with charges that investors were pulling thousands of units off the long-term rental market and contributing to the city’s housing woes.
Today, the situation is very different. The tourism industry has been decimated, and Toronto has imposed long-delayed rules that restrict short-term rentals to principal residences. Some hosts have opted to find long-term tenants – a change that has been welcomed by the city.
“We don’t want 10 investment properties on one floor of a condo [used as short-term rentals], changing the dynamic of that condo,” said Carleton Grant, executive director of municipal licensing and standards for Toronto. “We are hoping the numbers come down.”
He added: “We do want people actually to be renting [their units] on the long-term market.”
To some extent, that transition is under way. Toronto has seen a surge of condos put up for rent. At the end of October, there were about 12,200 units listed for lease in the Greater Toronto Area, an increase of 210 per cent from a year ago, according to brokerage firm Realosophy.
The bulk of the added supply is the result of tenants leaving their units, Realosophy found in a recent analysis. That “lines up with anecdotes we’ve heard about people losing their jobs and moving back home” or people who are still employed “but their 450-square-foot condo is just too small to live and work out of,” said president John Pasalis.
Still, short-term rentals have made a contribution to the city’s housing supply. About a fifth of the increase in condo supply comes from furnished units. Those are “a good proxy” for former short-term rentals, “because if you’re an Airbnb landlord, your unit’s already furnished,” Mr. Pasalis said. “You’re not going to take the furniture out and try to lease it unfurnished.”
In the GTA, about 2,500 furnished condos were listed for lease in the third quarter, a 68-per-cent increase from a year ago, according to figures provided by real estate consulting firm Urbanation, which said “almost all” would be within Toronto.
“Many investor-owners took their units out of the short-term rental market” in the third quarter, said Toronto Real Estate Board president Lisa Patel in a recent news release.
It’s unclear how the situation will evolve this winter.
For one, it appears some hosts are waiting on the sidelines. Short-term rentals can be advertised on platforms but remain unavailable to book. In October, there were just over 20,000 Airbnb listings advertised in Toronto, according to AirDNA. While that was down 19 per cent from a year ago, the decline was larger for available listings – suggesting many hosts were merely keeping their doors closed as the pandemic plays out.
There’s also the looming deadline for host registrations. Hosts must register with the city by Dec. 31, but as of Nov. 5 fewer than 1,200 applications had been received – a small fraction of the hosts in Toronto. “I thought it would be a little stronger,” Mr. Grant said. Some hosts may be unaware of the deadline, he said, or perhaps they are waiting longer.
After Dec. 31, any new hosts will need approval from the city before listing online. As for the laggards, Mr. Grant hasn’t ruled out a swift crackdown.
“If we need to come down hard in those first few weeks, to reinforce the importance of registering, we will do it.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.