There's no sign of a reversal of skyrocketing prices
The spectre of eroding housing affordability looms across all asset classes, as the average condo renter in Toronto will need to save nearly 1.5 years’ worth of rent just to afford a down payment for a condo unit in the region, according to a new report by Zoocasa.
As of August, the national asking rent reached a record high of $2,117 per month, data from Rentals.ca indicated. The Toronto Regional Real Estate Board also reported that the region’s average one-bedroom condo apartment rent went up by 11.6% annually to reach $2,532 per month during the second quarter.
Zoocasa found that majority of Toronto neighbourhoods need 16 months or more of rent to save up for the minimum down payment in their respective areas.
“For the City of Toronto as a whole, it would take the average renter 17.9 months to come up with the $51,983 down payment necessary to purchase the average condo apartment priced at $769,832,” Zoocasa said. “Not only has the average price of a condo in the city increased in the last two quarters, but the average condo lease rate has also increased by over $100.”
The average renter would need 93.3 months to save for the minimum down payment of $314,554 in York Mills, Bridle Path, Hoggs Hollow.
Rosedale, Moore Park has the most expensive average condo apartment price at $1.720 million, which will take the average renter 92.5 months to save up thee $344,000 required to purchase the average condo apartment.
Paul Baron, President of the Toronto Regional Real Estate Board, has indicated that Toronto's #housingmarket may experience continued turbulence in the coming months due to ongoing uncertainty surrounding interest rates. https://t.co/JkJSDR07wH#mortgageindustry #interestrates— Canadian Mortgage Professional Magazine (@CMPmagazine) September 7, 2023
Affordability improved in some areas of Toronto
At the same time, nine neighbourhoods in Toronto actually saw a decrease in the time it takes to save for a condo down payment.
West Hill, Centennial Scarborough, saw the number of months needed to save for a minimum condo down payment fell from 10.1 months in Q4 2022 to 9.5 months during the second quarter.
“The last time we analyzed this data (back in Q4 2022), there weren’t any neighbourhoods where it took less than 10 months to save for a condo down payment,” Zoocasa said.
“However, previously there were eight neighbourhoods where it would take less than 12 months to save for a condo down payment, and now there are only five.”