The cost of renting a condo in Toronto has skyrocketed over the first quarter of 2018, according to analysts – and buying is no better an option for most.
Urbanation, a market research firm that’s been tracking the city’s condominium industry since 1981, announced in a new report on Wednesday that condo rents increased by nearly 11 per cent, year over year, throughout the GTA.
Rent prices on condos in the City of Toronto itself went up by 10.7 per cent, on average, to $2,432 per month for a 711-square-foot unit.
The Greater Toronto Area saw an identical increase of 10.7 per cent compared to the same period last year, though the monthly average was lower at $2,206 for a typically-sized unit of 740 square feet.
Rents rise 11% as income required to qualify for average priced condo reaches $100,000 – per our latest rental report for Q1-2018: https://t.co/QanejsFBbM
— Urbanation (@Urbanation) April 11, 2018
Meanwhile, the income required to purchase an average-priced resale condo in the GTA ($558,000) has reached $100,000.
That’s up a full 23 per cent over last year’s required income price of $77,000, and 36 per cent over what it was two years ago.
Urbanation blames the steep increase on a lack of supply, a strong growth in condo prices, and the new OSFI mortgage qualification rules.
Senior Vice President Shaun Hildebrand noted to The Globe and Mail that “growing immigration and a strong job market are increasing demand for rental accommodation,” while current renters are staying put instead of buying, as they would have in the past.
Finding a condo to rent in Toronto is tough enough. Paying for it just got a lot harder https://t.co/SBRemv2UZJ pic.twitter.com/u4epbdOqx8
— Bloomberg Canada (@BloombergCA) April 11, 2018
“Despite the large increase in rents, Urbanation calculated that it is still less expensive to rent than carry the ownership costs of the equivalent sized condo unit,” reads the firm’s most-recent report.
“As of two years ago, the costs of renting and owning were virtually equal.”
This might help explain why turnover on the rental market is so very low in Toronto right now.
According to Urbanation, the purpose-built projects that have been completed here since 2015 had an average vacancy rate of just 0.4% last quarter.