Rent has gotten to the point in Toronto where many are furtively searching online for Calgary homes for sale, Edmonton real estate or any place where the market is more balanced. Anywhere unlike here, where rental rates for condos are increasing over 10 per cent a year.
The Toronto Real Estate Board’s (TREB) Q2 rental report says that bachelor units rented through MLS now go for $1,716, an increase of 10.6 per cent year over year. Sadly, that’s the most affordable entry point into the condo market and the only type of unit available for under $2,000. One-bedroom units now go for $2,055, a 10.4-per-cent increase. If you’d like to split costs with a roommate, have a baby, or simply desire more space, you’re looking at $2,755 for a two-bedroom or $3,460 for a three-bedroom.
The situation is unlikely to ease anytime soon as vacancy rates remain at a historic low, below 1 per cent.
TREB President Garry Bhaura says that with demand for rentals steadily increasing, more needs to be done at the policy level to ensure supply is available and remains affordable for Toronto residents.
“The demand for condominium apartment rentals remained strong compared to the number of units available for rent. Current market conditions point to the fact that renters have little choice when it comes to finding a place to live,” he says. “Governments need to look at ways to increase the supply of rental accommodation, both in terms for purpose-built rental properties and individual investor-held units. This would go a long way to easing the pace of rent growth in the GTA.”
With rent so expensive, many are asking themselves if they might as well buy, and Zoocasa ran the numbers to find out.
The average cost to buy a condo in Toronto is now at $603,480, says TREB. That would require a monthly mortgage payment of $2,297 (assuming a 20-per-cent down payment, 3.05-per-cent mortgage rate, and 25-year amortization), and actually comes to $120 less spent per month on shelter costs.
But the rent-or buy-equation is really a neighbourhood-by-neighbourhood decision, since actual prices vary wildly.
Zoocasa calculated the average monthly rent and compared it to the average condo prices in each City of Toronto MLS district and found that it makes more financial sense, from a monthly payment perspective, to own rather than rent in 21 of the 35 neighbourhoods studied. (Of course, that’s not including maintenance fees or property tax, which varies per unit.)
It almost always makes more sense to buy if you plan to live in the north-west or north-east ends of the city like Black Creek, Rexdale-Kipling, Bathurst Manor, Agincourt North or Malvern.
It’s cheaper, however, to rent in high-demand, pricey, central areas like Rosedale, High Park, and the Entertainment District.
Check out the infographic below to see the full list and exactly how much you’ll save:
Zoocasa.com is a leading real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse real estate listings on the website or the free iOS app.