Condos on Fire in Downtown Toronto: INFOGRAPHIC
By: Danielle Kubes, Zoocasa
Condominiums were on fire in Toronto last year. Prices rose 23 per cent in 2017 from the year before to an average of $545,826, according to data from the Toronto Real Estate Board.
While that news may be music to the ears of sellers looking to offload their units, it’s not such great news for renters.
It’s no secret that the 416 rental market is dominated by condos.
Provincial rent control legislation from the Mike Harris government in the 90s made building rental-only towers unappealing to developers. So unappealing that developers almost entirely stopped building them in favour of condos. Consider that over the past 10 years only 2,400 purpose-built rental units have been added to the Toronto Area rental market compared to 76,000 condo units, says a 2017 report by Evergreen and Ryerson University.
Speculators snapped up many of these units, sometimes by the floor-full, hoping to cash in on the massive supply gap.
And with such a tight rental market – the vacancy rate is just 1.6 per cent – most of us who want to live in downtown Toronto have no other option but to rent these condo units. And let’s be honest: high-end appliances, concierges, on-site gyms and other amenities that condos provide are pretty tempting.
But the more expensive condos get, the more expensive rent gets. These speculators look to recoup their cost – of the mortgage, taxes, insurance and maintenance fees – plus a profit.
So whenever condos appreciate, likely does your rent.
But all is not created equal. If you can narrow down which neighbourhoods have appreciated the most, you can also narrow down your search to neighbourhoods that likely have cheaper rent.
Zoocasa reviewed over 400 buildings in downtown Toronto (south of Bloor between Dufferin and the Don Valley River). Price appreciation was calculated based on sold price per square foot in 2017 compared to 2016, and included buildings with a minimum of 25 transactions.
As expected, condos south of King Street appreciated the most. Nine of the top 10 buildings were south of this busy street, with the other one being just a few blocks north. The cluster of buildings surrounding CityPlace and Fort York is a particular area with which you should proceed with caution. The top appreciating condo building in Toronto is here – at 36.5%, the Apex at CityPlace.
You’re likely to have better luck seeking more manageable rent downtown by looking a bit north, from Bloor to Queen.
Check out this infographic above to see the details: