August 9, 2017
Toronto is the Best City of Opportunity for North American Renters: Study
Canadian City Outperforms All European and US Powerhouses—Toronto Comes Out Best City of Opportunity for Renters in North America
If you are already living in Toronto in your own house, we have some good news. If you’re only considering moving now, good luck with that… And it’s not you, it’s real estate.
Somebody blew the whistle and the news got out: living in Toronto is great. It’s not just rumors or popular opinion either; a study by PwC ranked Toronto as 3rd best city of opportunity in the world. But with great opportunities (and salaries) come big housing problems. Immigration in the GTA is at a 10-year high, prices are soaring.
Toronto Gets the Bronze for City of Opportunity in 2017
PwC created a study on cities of opportunity around the world and set up a top consisting of 30 cities. It is basically a top of the best cities to live and work in. The analysis is based on 10 main indicators, including among others: demographics and livability, ease of doing business and infrastructure. Toronto came in third, just after London and Singapore, but leaving behind cities like Paris, New York and San Francisco. Then the guys from RENTCafé came, flipped the script and showed us what these top cities look like from a renter’s perspective.
Before Opportunity Knocks, You Need a Place with a Door
The RENTCafé study compares average wages to average rent prices and ranks the cities of opportunity by rent affordability. Are people well-paid enough to afford a rental apartment in these cities? It turns out in most of them not really.
On the list of rent affordability, Toronto is the 11th, but is more than 10 places higher than San Francisco, New York, LA or London. Kuala Lumpur, which initially made it only to the 20th place in the PwC top, jumped straight to the first place on the top of rental affordability, with a rent-to-income ratio of just 20%.
Whoa, Rent Affordability and Toronto in the same sentence? Toronto is not cheap by any means, the average yearly rent is $17,760, with a median household income of $60,500 it results that we spend 29% of our salaries on rent. That’s a lot of money but we’re still much better off than our US neighbours from LA, or Manhattan where people spend 47% and 59% of their income on housing. And let’s keep in mind that these places make less of an “opportunity city” than Toronto. The question is how long can we be the “lucky ones” from the rent-burdened part of the world? If things continue like this, not long.
Worst Comes to Worst?
While one of the best cities to live in the world, good luck with finding an apartment in Toronto! Immigration to the GTA is at a 10-year high, fueled by a diverse employment market with especially well-paid jobs in the finance and tech sectors. The city is facing serious housing problems, people cannot afford to buy so they rent longer. Which in turn, you guessed it, makes renting more expensive. Demand is huge and there is not enough construction going on to cope with it. Prices are soaring, while vacancies are practically nonexistent, with a rate lingering around 1%, the lowest in 7 years. In certain areas of town queues are stretching around the block for showings. The provincial government is trying to tackle the situation, but so far the newly passed laws only made condos more expensive. Unless development revs up in the residential domain, rent burden will also start knocking on Toronto’s door, not just the opportunities.