The rising cost of rent was a major theme throughout 2022 and this trend is likely to continue in 2023, driving many prospective buyers to seek more affordable property types. Reflecting this, the Toronto Regional Real Estate Board recently reported that condo sales were up 34% across the region with selling prices also steadily increasing.
Record population growth as a result of an influx of immigration is another factor pushing the demand for housing, especially in the GTA. As the most affordable segment in the market, condos remain an especially attractive option for first-time buyers and newcomers to Canada. This will keep condo demand – both in ownership and rental markets – growing for the foreseeable future.
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The Cost of Renting Compared to Condo Ownership Across Toronto
The average one-bedroom condo apartment cost $2,503 – a year-over-year increase of 19% – in the fourth quarter of 2022, while a two-bedroom condo rose by 14.1% for an average of $3,178.
Renters hoping to transition into homeownership might wonder how these costs compare to that of a condo down payment. To find out, Zoocasa compared average condo apartment lease rates with sold prices for Toronto condos in 35 neighbourhoods within the 416. The study calculated the minimum down payment required to purchase the average condo unit in each neighbourhood, as well as the number of months of rent that would be equivalent to the down payment amount. Average condo apartment sold prices and monthly lease rates for Q4 2022 were sourced from the Toronto Real Estate Board.
For example, in the City of Toronto as a whole, an average renter would need to save the equivalent of 16.5 months of rent to come up with the minimum $46,052 down payment necessary to purchase the average condo apartment unit priced at $710,520.
The findings of our study reveal that in 12 out of 35 neighbourhoods it would take 12 months or less to save for the necessary minimum condo down payment. These more affordable neighbourhoods are primarily located on the edges of the city in places like Scarborough Village, Yorkdale-Glen Park Weston, West Hill, Rouge, Thorncliffe Park, and Black Creek.
As expected, heading closer towards the center of the city will increase the necessary minimum down payment required, with the majority of neighbourhoods in the 13 to 24 months range.
In order to come up with the highest minimum down payment on our list of $348,870, it would require saving 90 months of rent. The pricest neighbourhood include Bedford Park-Nortown, Lawrence Park, Forest Hill North, York Mills, Bridle Path, and Hoggs Hollow.
Check out the infographic below to see how months of rent compare to minimum down payment amounts in neighbourhoods across the City of Toronto:
5 Toronto Neighbourhoods Where the Down Payment Savings Timeline is Shortest
- 1 – West Hill, Centennial Scarborough
- Average Condo Price: $475,833
- Minimum Down Payment: $23,792
- Average Monthly Lease Rate: $2,356
- # of Rent-Free Months to Save Down Payment: 10.1
- 2 – Rexdale-Kipling, West Humber Clairville
- Average Condo Price: $509,323
- Minimum Down Payment: $25,932
- Average Monthly Lease Rate: $2,564
- # of Rent-Free Months to Save Down Payment: 10.1
- 3 – Black Creek, York University Heights
- Average Condo Price: $494,379
- Minimum Down Payment: $24,719
- Average Monthly Lease Rate: $2,415
- # of Rent-Free Months to Save Down Payment: 10.2
- 4 – Willowridge-Martingrove-Richview
- Average Condo Price: $536,783
- Minimum Down Payment: $28,678
- Average Monthly Lease Rate: $2,642
- # of Rent-Free Months to Save Down Payment: 10.8
- 5 – Scarborough Village, Guildwood
- Average Condo Price: $526,307
- Minimum Down Payment: $27,631
- Average Monthly Lease Rate: $2,470
- # of Rent-Free Months to Save Down Payment: 11.2
5 Toronto Neighbourhoods Where the Down Payment Savings Timeline is Longest
- 1 – Bedford Park-Nortown, Lawrence Park, Forest Hill North
- Average Condo Price: $1,236,058
- Minimum Down Payment: $247,212
- Average Monthly Lease Rate: $2,722
- # of Rent-Free Months to Save Down Payment: 90.8
- 2 – York Mills, Bridle Path, Hoggs Hollow
- Average Condo Price: $1,744,350
- Minimum Down Payment: $348,870
- Average Monthly Lease Rate: $3,876
- # of Rent-Free Months to Save Down Payment: 90
- 3 – Yorkville, Annex, Summerhill
- Average Condo Price: $1,342,721
- Minimum Down Payment: $268,544
- Average Monthly Lease Rate: $3,800
- # of Rent-Free Months to Save Down Payment: 70.7
- 4 – Forest Hill, Oakwood Village
- Average Condo Price: $935,055
- Minimum Down Payment: $68,506
- Average Monthly Lease Rate: $2,701
- # of Rent-Free Months to Save Down Payment: 25.4
- 5 – The Beaches, Upper Beaches
- Average Condo Price: $865,185
- Minimum Down Payment: $61,519
- Average Monthly Lease Rate: $3,016
- # of Rent-Free Months to Save Down Payment: 20.4
Methodology
Average condo apartment sold prices for Q4 2022 were sourced from the Toronto Real Estate Board.
Calculation of the minimum down payment required:
- Home purchase price is $500,000 or less: 5% of the purchase price
- Home purchase price is $500,000 to $999,999: 5% of the first $500,000 of the purchase price, plus 10% for the portion of the purchase price above $500,000
- Home purchase price is $1 million or more: 20% of the purchase price
