Toronto is a metropolis but living in the GTA can be challenging. Because of the mortgage stress test that was implemented several years ago and the overall cost of property, many have been unable to enter the housing market. This has led to a hyper-competitive rental market with no end in sight.
As if rental prices aren’t high enough, this year might see a 11% hike. This is bad news for young professionals in Canada’s most expensive city.
Reasons for this Hike
The lack of inventory is the biggest culprit. Supply is driving demand, allowing landlords and property owners to charge renters more. This lack of inventory is the result of people staying put because they don’t want to be susceptible to higher rent. The difference in one’s current rent compared to moving to a new place could be hundreds of dollars.
There is an incentive for people to stay where they are even if they want to upgrade or move to a more desirable neighbourhood.
The Impact on Renters
Per a panel of housing experts, the average annual rent for a typical apartment or condo in Downtown Toronto will increase, making moving or living in Core Toronto very difficult those with a relatively normal income.
The new average cost of renting will make moving in the foreseeable future impossible for some as a person will need to pay for first and last month’s rent in addition to being able to carry the home monthly.
Toronto will experience a more significant increase than other major Canadian cities like Ottawa and Vancouver.
It’s Time to Consider a Mortgage
Most want to buy a property but feel that they can’t afford it. Buying a home costs more but the difference between a mortgage and rent could be negligible, or a mortgage could conceivably cost less per month.
If you don’t have enough money to cover a 20% down payment or the other fees, then make 2019 a year of saving. Put off upgrading your rental home and make other sacrifices so that getting approved for a mortgage can be a reality in 2020.
If you want to learn more about mortgage approval or start planning, then contact us today!