More than 20 per cent of Toronto renters are paying more than the city’s rent for their home, a Globe and Mail analysis has found.
The study, conducted by the University of Toronto’s Institute for Housing Policy and Management, found that, for rent rolls up to September 2017, the average monthly rent was $1,829.
On the opposite end of the spectrum, the monthly rent for a two-bedroom rental was $2,077.
While the average rent for the condo market was $3,929, the city was the only major city where renters were paying more for condos than they were for rent.
The median price of a condo was $621, while the median rent was almost $4,000.
For a three-bedroom, the median price was $845, while for a four-bedroom it was $950.
The study also found that the average amount paid for a rent roll up was about $2.4 million.
The report found that rent rollups for rent moved boxes up and down a lot, and that the median amount paid was about five per cent.
While that might sound like a lot to pay for a home, it was the third highest monthly amount paid in the city, behind the average of $2 million paid by Toronto renters, according to the study.
“The rent rollup is a very small part of the rent equation,” said Mark Meehan, the institute’s director.
“It’s a good place to start to understand the cost of rent and how it relates to your ability to afford a house.”
For most of the city — and in some cases, the entire province — rents are indexed to inflation.
In Toronto, that means rents are based on the price of the home in question at the time of the rental rollup.
That’s because the price was the first thing to go, so a change in that price can be costly.
Meehans report found the average price for a one-bedroom condo in the Toronto area was $935, while a two bedroom was $875.
In the condo boom, rent rolls are up a lot because of a lack of inventory.
In a market where condos are becoming more common, it’s not clear that that will continue.
“I don’t think the market will slow down,” said Andrew Bresnahan, a real estate broker in the downtown Toronto neighbourhood of Yorkville.
“If anything, I think we’re going to see an increase in people wanting to move out of their units and into apartments.”
While the rent rollback might seem like an expensive change, it actually is a good one.
In the first year of the rollback, the cost per month for a three bedroom unit was only $2 more than a one bedroom unit, and the cost for a six-bedroom was $4 less than a two.
Renters are saving money in rent rolls.
“When the rollup was introduced, it didn’t seem like it was a big deal,” said Meehmans report.
“You’d get a nice little return on your investment, but now you’ve got a very good return on that investment.”
The report also looked at the average cost per square foot of a one and a half-storey apartment in the GTA.
It found that a two storey apartment was only a little more expensive than a three storey one, and a four storey was a little less expensive than two.
For condos, the price difference between a two and a one storey unit was less than 1 per cent, while it was more than 5 per cent for a condo.
But the real estate market has not kept pace with the growth in condominiums in the market, Meehamans report said.
The average price of condominium in the province last year was $5,000, while that was down from $7,200 in the same year of 2017.
“For condos, they’re not seeing the growth that we saw for condos in the past,” said Bresnanahan.
“The condo market is just really slow.”
In the meantime, the study found that Toronto is struggling to keep up with the rising cost of housing.
While prices for rent are down, prices for condos are up.
And in some areas, condos are seeing more rent growth than rent rolls, suggesting that a new condominium is likely in the works.
“We’ve been in a long, slow rental boom, and it’s kind of a slow recovery,” said Peter Fassbender, an economist at University of Guelph.
“We need to be paying more attention to this.”
Meehanas report found a lot of the slowdown is the result of a “huge amount of demand” for homes in Toronto, and as a result, demand for rental housing is slowing.
But Meehawans study found a number of factors that could be contributing to that, including more supply in