Affordable house rentals are the most attractive option to more than half of the population of Toronto. Due to the rise of housing prices in Canada’s largest city, owning a house of over C$800,000 with an average income has become increasingly difficult.
Since people generally prefer condos over apartments, TREB reported a 7.7% climb in the rental activity when compared to the last year. And thus, the rent prices vary from C$2,000 per month to C$ 20,000 per month, depending on the size and amenities of the building. The neighboring suburbs, such as Mississauga or Brampton, do offer lower rents at the cost of longer commutes. However, businesses and individuals are attracted to the center of an exciting and busy city life where amenities are available easily.
With the steady increase in the growth rate of rental housing prices, let’s look at why renting a condo in Toronto is getting expensive.
A Flourishing Tech Economy
One of the main factors driving the growth of Toronto is its flourishing tech industry that attracts big ventures like Amazon, Microsoft’s new hub, Google City, and Apple to the city. The driving force of this sector i.e., the well-educated talent pool from all over the world, needs a place to stay, preferably somewhere near work. It contributes to the spike in demand for housing but the supply sector is far behind. The influx in the growth rate of the rental prices of condos burns the budget of a homebuyer. In this regard, Toronto presents a national concern to Canada as its top technological and financial hub.
Condos over Apartments and Renting over Owning
As mentioned above, people with average income cannot afford to purchase a property. In addition to that, the down payment, taxes, and maintenance fees push people towards renting a residence. Ironically, even after renting a house, the factor that helps decide between a condo or an apartment boils down to ownership. In apartments, the whole building is owned by one person, whereas in a condo, one person or entity owns the unit. Townhouses and apartments are the most common types of condos available on the market. A recent statistic showed that almost 40% of Toronto’s condo owners do not live at their properties: they are either rented, vacant, or used as a second property. The simple equation of high demand and a shortage of supply leads has lead to a steady increase in housing expenses.
Unstoppable Growth
The population growth has been recorded to be the fastest in the last 30 years. This spike in the number of locals, immigrants and job seekers proportionally increased the demand for suitable housing which needs to be fulfilled. The limited number of available alternatives in the market consequently boosted the condo rent by 30% between 2006 and 2018.
Conclusion
Central Toronto is the beating heart of the country and with a continuing influx of people, and a limited supply of new rentals, the price of rent will continue to grow.
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