It’s no surprise that Toronto’s real estate prices keep many young and first-time home buyers from entering the market. According to the Canadian Real Estate Association, the average benchmark price for a home in Greater Toronto is $1,097,300 (July 2024). The good news is that the average price dropped five per cent from the previous year. Still, that’s a pretty big down payment to pull together, and getting approved for a big mortgage may be difficult, if not impossible.
Related: Real Estate Agents Across Canada Share Their 2024 Predictions
Your other option, of course, is to rent. But you’ll pay for it if you want to stay in Toronto. Again, there is some good news. Toronto is cheaper than Vancouver, the most expensive market in Canada. Burnaby, BC, comes in at number two. However, rental apartments in Toronto are still the third most expensive in the country. According to Rentals.ca’s August Rent Report, the monthly rent for a one-bedroom is $2,428, while a two-bedroom will set you back $3,158. But in both cases, the average rent has dropped more than seven per cent year-to-year.
Related: It’s Official: Toronto Is Now Less Affordable Than New York and Miami
The rental crisis in Toronto may have left you feeling frustrated and wondering what to do. We asked Toronto Realtor Jacob Berkenblit of Right At Home Realty/Brokerage for his professional advice on how and where to find affordable options without leaving the GTA.
How would you describe the current rental market in Toronto, particularly for young renters?
In recent years, Toronto’s rental market has been quite competitive due to rising population and housing demand. However, we’re now seeing a slowdown in new home construction, down by 37 per cent. Additionally, the government’s plan to reduce the number of non-permanent residents could lower rental demand, as these individuals are typically renters.
This is especially concerning for the condo market, which already has a high supply. With interest rates remaining elevated, affordability remains a major issue, and higher rates are also pushing some landlords to sell their rental properties, further decreasing the rental supply.
All of these factors are creating a tough environment for renters, with some areas experiencing rental drops of 10 to 15 per cent. For those looking to upgrade or move into areas they might have previously been priced out of, this could present an interesting opportunity.
Related: Expert Tips That Will Help You Become a Homeowner Before 40
Which neighbourhoods in Toronto are currently popular among young renters, and are there any up-and-coming areas that offer good value?
I think it really depends on what you’re looking for! If you’re a student, you’ll want to be close to downtown schools. For a buzzing nightlife, Queen West near Ossington, King St. W. and Liberty Village are fantastic — they’ve got great spots to hang out and a tight-knit community vibe. If you’re after a more relaxed, community feel, check out places like St. Clair W., Yonge and Davisville/Eglinton, The Beach, or East York/Danforth and areas like Mimico and Roncesvalles offer a calm, connected neighbourhood that’s still super convenient.
Related: Toronto’s 10 Best Neighbourhoods to Live and Work Revealed
What advice do you have for renters for navigating such a competitive market, and what are the best strategies for finding rental properties in Toronto?
First things first, take stock of your current situation. Are you leasing right now? You’ll need to figure out if you have to give 60 days’ notice or if you’ve already been given notice. When applying for a new rental, make sure you have your credit report, proof of income (like employment letters or recent pay stubs), ID and references all lined up. Honesty is key — it’s also good to build a solid relationship with your landlord.
Personally, I think good credit is a strong sign of a great tenant. Also, try to stick to the rule of spending no more than one-third of your salary on rent; spending more could raise a red flag. And if necessary, be ready to have a co-signer or guarantor, who will also need to provide supporting documents.
Related: Should You Rent or Buy? Scott McGillivray Weighs the Pros and Cons
What are the benefits of working with a real estate agent when looking for a rental?
Having a real estate agent can make the process smoother and more efficient and is often highly beneficial. For one, it often doesn’t cost the tenant anything, as the landlord typically covers the agent’s fee. An experienced agent will save you time by managing the search, arranging viewings and handling landlord communications. They should have deep knowledge of the local market and can negotiate favourable terms on your behalf. They should be well-versed in the Residential Tenancies Act (RTA), ensuring you avoid potential pitfalls.
Are there any common pitfalls or red flags that renters should watch out for, especially when signing a lease?
Be cautious of unusually low rent, as it could be a scam to attract unsuspecting renters. Make sure the lease is detailed and clear, covering all terms like rent amount, payment dates and who handles repairs, cleanings, deposits and utilities. Watch out for excessive late fees, untraceable payment methods and any pressure to sign quickly without thoroughly reviewing the lease.
Ensure you view the property before signing and check that the lease doesn’t unfairly place all repair responsibilities on you or include clauses that waive the landlord’s responsibility for issues. Always take your time to read the lease carefully and ask questions. Work with your agent to solve issues and/or clear up ambiguity.
Related: 10 Things You Need to Remember Before Signing a New Lease
