With Canada’s largest city seeing a marked increase in condo construction, some homeowners and buyers are wondering if it’s smarter to rent in Toronto or buy.
Renting in Toronto
Patti Russo, principal broker with RE/MAX Hallmark Estate Realty Inc. — a company that specializes in the resale of luxury condos in the downtown core — says there has been a surge in demand for rental housing in the city.
Russo says when it comes to people wanting to rent vs buy in Toronto, the two groups are looking at the same houses. She says she meets people who are looking for a condo, and others looking for a detached home.
“The mentality of buying versus renting has completely changed in Toronto,” she said, adding that in the past, people thought of buying a condo as a means to get into the housing market, because buying a house was too expensive.
“The paradigm of buying versus renting has been flipped,” said Russo. “Now people see buying a condominium, for example, in terms of affordability, as a reasonable opportunity to buy, whereas in the past you wouldn’t even consider a condo as an option.”
‘Rental demand is skyrocketing’
Maria Mastellone, co-owner of Old Oak Realty — a company that specializes in the resale of high-end properties in Toronto’s west end — says that rental demand is increasing rapidly.
“I would say that rental demand is skyrocketing,” she said. “This is the best it’s ever been. It’s absolutely the best it’s ever been in my experience.”
Mastellone said that despite the ongoing population increase in the city, the luxury condo market has not always been as sought after. She said that was due to a lack of inventory, since many homeowners were simply choosing to stay put.
Renting in Toronto comes at a cost
For many people looking to rent in the downtown core, finding a suitable rental property is a challenge.
The average monthly rent for a one-bedroom apartment in the city of Toronto is just over $2,000, according to a report from Padmapper, a Toronto-based apartment rental search website. The average rent for a two-bedroom apartment in the city is around $2,430.
For some people in the city, buying a home is the most affordable option, despite owning fewer square feet of space. Others, however, may be looking at the options in the downtown core, like the recently-opened Yorkdale Mall, which has been described as an affordable option for people looking for a place to rent.
Mastellone said that while Yorkdale is certainly an example of the burgeoning condo market, it is not necessarily a one-size-fits-all solution.
She said she has recently been working with tenants who have purchased condos in Yorkdale and in other high-end areas, who have decided to rent their condos.
Why some home owners are selling
Not everyone is ready to hop on the condo bandwagon.
Jane Golding, the former owner of a $1.7 million home in the Toronto’s Forest Hill neighbourhood, says she is selling her home, because it is too expensive to maintain and she would rather pay down her mortgage.
“I don’t have any idea where I will end up in the next five to 10 years,” said Golding. “I thought that home ownership would be the solution.”
Some homeowners are choosing to sell their homes, rather than keep it as a rental property. (Nick Laham/Getty Images)
Golding has decided to sell her five-bedroom, six-bathroom home, because she doesn’t want to maintain it as a rental property. She says a few years ago, she had considered selling her property, but ultimately decided against it.
“The profit of a property would be nowhere near enough to pay my property tax, which is very significant, and I have some maintenance issues that I don’t want to deal with,” she said.
However, Golding says that she has other options.
She could continue to rent the property, but she is also looking at condo buildings in Toronto’s Leslieville neighbourhood.
Golding says she knows that housing in Toronto is expensive, but she believes that there are still many solutions that she can take advantage of.
“I see my children get married and go to university,” she said. “It’s not like I’m going to stop working.” With a report from CTV Toronto’s Ryan Harding
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Having their eye on a multi-million dollar home, both Donald and Mary Bishop have had to make decisions to “upgrade” to a larger home to better accommodate their growing family.
Despite the affordability challenges, the couple, who live in the northeastern corner of the city, say they want to stay put.
“We’ve been through some very hard times in the past, and [we] have no plans to leave Toronto,” said Bishop.
Like Golding, Bishop hopes to sell her home in the near future, and go condo hunting.
For some, the realities of living in an expensive city like Toronto can be a “nuisance,” and for those, they are looking for other options, such as renting a home.
Right now, however, not everyone can afford a luxury condo.