At the height of the COVID-19 pandemic, Toronto companies that manage short term rentals across the city were either downsizing or completely closing up shop. Those that survived the last 2 years are now experiencing a vigorous (albeit likely temporary) turnaround caused by a combination of factors:
- Post-COVID pent up demand for business and leisure travel
- Ease of travel restrictions and quarantine requirements for foreign nationals
- The opening up of the economy, and along with it, the resumption of corporate relocation plans to Toronto (Canada Goose and Snowflake Inc. are just two recent examples of companies announcing the opening of new offices in Toronto)
On the supply side, properties that were taken off the short term rental market during the pandemic due to lack of tenants are slow to come back (if at all). Understandably, their owners are feeling somewhat "once bitten, twice shy". In many cases, they've either been sold and occupied by the new owners, or have been rented on the long-term lease market.
While some believed this would help relieve the city's housing affordability issues, the opposite happened – unfurnished rents have dramatically increased in the past 6 months. Additionally, the sharp increase in furnished rental demand combined with the shortage of supply has created a perfect storm.
In Toronto, availability is low across the city, hotels and Airbnb rentals (the next closest thing) are full, and prices are skyrocketing. The chart below (provided by Sky View Suites), outlines average nightly prices (for minimum of 30-day stays) over the last few months ending September 2022.
While this is a welcome influx of revenue for all the furnished rental companies who managed to survive the pandemic, there are some unintended side effects for vulnerable populations like people coming to Toronto for medical reasons.