We often talk about the money “wasted” on rent by young people in Toronto and then compare those costs to what they could be paying into their mortgage.
But what about people who can’t even afford to rent?
I have two friends currently looking for rentals in Toronto and you won’t believe what they’re looking to pay…
What do you think the “average” person pays for rent in Toronto?
I know, I know….first we have to define “average.”
We’d have to look at the person’s age, income, and of course the location within Toronto before we could even hazard a guess.
But then we’d also have to look at the property itself and distinguish between houses and condos, and then break it down even further by size.
So forget all that, and let’s just talk about “one bedroom condos” for simplicity.
What do you think the average 1-bedroom condo leases for in downtown Toronto, ie. C01, and C08, bordered by DVP/Waterfront/Dufferin/Bloor?
Take away the 1-bedroom-plus-den units, and take away units with parking.
Let’s dumb it right down to the basic 1-bedrooms. No dens, no parking.
There are currently 153 condos listed on MLS that meet this criteria, and the average asking price is $1519.36.
Wow. Did you expect that? I sure didn’t!
When I think about the “average” 1-bedroom with no den and no parking, I’d like to think the price is probably around $1300 – $1400 per month.
I guess that’s just wishful thinking…
A friend of mine is moving back from Japan in July and will be living in Toronto for the first time in five full years.
He emailed me last week and asked me to help him find a “place to live” when he returns, and without even thinking, I sent him something to the extent of:
Hey dude, no problem! Let me know when you want to get started. The average 1-bedroom is going to run you about $1400 per month, FYI. Do you need a parking space? What area are you looking in? Talk to you soon buddy.
His response was something like this:
Well, at least he responded in pastel…
Naturally, my friend freaked out at my “modest” estimate of $1400 per month for rent.
He emailed me back and said that he has been teaching English in Japan for five years; living in squalor while eating rice and saving 100-yen coins like they were gold. He told me he’d like to find something more affordable…..something in the $600 – $650 per month bracket.
Does that even exist?
Sorry, I don’t want to sound like an elitist, but I can’t imagine paying $600 per month in rent!
Of course, my friend went on to say that he’s looking for an apartment in a high rise building or a basement apartment. Those will tide him over for the time being as he reintegrates himself with Canadian life.
But I explained to him that even the days of the $600 per month basement apartments have passed! He’d be looking around $800 – $900 for a “decent” basement apartment, if that’s not an oxymoron…
As for the prototypical “high rise apartments,” I don’t think you’ll be finding any $600 per month apartments in Toronto either! I paid $610 per month to rent my apartment in Hamilton while attending university…..over a decade ago!
So my friend finally said, “Okay, I guess I can just look for a room in a house.
How is that for an option?
In fact, if you had a group of four guys with $650 each, you could find yourselves a nice little 4-bedroom family home!
I’d like to think that $2600 could provide a little selection!
What does this say about the state of the Toronto rental market?
Well once again, I’d like to compare it to other cities….like New York!
Try finding a rental in Manhattan for less than two-gees and I’m sure you’ll have a swell time!
$1400 per month for a 1-bedroom condo in Toronto pales in comparison to other metropolitan areas, but on its own, that’s really still a lot of money when you sit down and think about it.
$1400 per month is $16,800 per year.
Now what is a reasonable rent/income ratio?
Look online, and you’ll see ratios ranging from 25% to 35%.
This assumes that the “average” condo renter at $1400 per month is making an average of $48,000 – $67,200.
Gee, I wonder what the average household income in Toronto happens to be…
Another friend of mine is being evicted from his 3-bedroom, $1200 per month apartment at Bathurst & Eglinton where the various landlords haven’t raised the price in the last four years.
He’s coming from a point in the market that shouldn’t have existed four years ago, let alone today.
How do you go from paying $400 per month to looking at alternatives? What alternatives are there?
With vacancy rates in Toronto at less than two-percent, it’s kind of hard to imagine rents coming down any time soon…