It may be hard to find an affordable place to live in Toronto, but it’s still less expensive than New York or Hong Kong.
Toronto came 12th in a ranking of the worlds most expensive places to live, according to a new report by CBRE Residential that analyzed housing and rental prices for 35 major cities around the world.
CBRE named Hong Kong, Singapore and Shanghai as the three most expensive cities. The top city in Canada was Vancouver at number four, while Montreal ranked 25th.
According to the report, the average price of a Toronto home is now $766,832 (all figures Canadian), which is more than double the cost of an average Montreal home. In the most expensive housing market, Hong Kong, the average price of a house is $1,647,722.
Rental prices in Toronto jumped nearly 5 per cent, with the report noting that recent demand for rental properties has been generated by baby boomers looking to downsize and professionals moving to the city to work in the tech industry. New York City boasts the highest monthly rents, with an average of $3,794, while rents in Vancouver are the highest in Canada at an average of $1,390.
The report says housing prices grew in all but five of the cities it looked at, In Toronto, housing prices rose 1.4 per cent in the last year, down considerably from an average of 10 per cent a year over the past decade. According to CBRE, millennials in the city are feeling the effects, with the housing market proving too expensive for many of them to purchase property.
Montreal’s housing prices grew 5.9 per cent, giving it the 11th highest increase in housing prices and the highest increase in Canada. The cities with the biggest increases in housing prices were concentrated in Europe, with Madrid, Dublin and Barcelona experiencing growth rates of more than 10 per cent. Those cities also were among the top five for rental growth.
CBRE says rental prices went up 4.8 per cent in Toronto in the last year, driven by a near-historically low vacancy rate of 1.2 per cent. In Canada, Vancouver had the highest rental growth rate with 6.8 per cent.
A report released in January of 2019 by the Federation of Rental-housing Providers of Ontario (FRPO) said more than 40 neighbourhoods in Toronto had a rental vacancy rate of less than 1 per cent.
Residential property market conditions became unsteady in April 2017 following the implementation of a 15 per cent foreign buyers tax, said CBRE. The Bank of Canada hiked interest rates in 2017 and 2018, and new borrowing regulations cooled the housing market.
The FRPO report said Toronto market will experience a shortage of between 9,000 and 10,000 rental units.
In February, the Star reported that a deepening rental crisis that could see Ontario short of up to 100,000 units in another decade.
Emma Sandri is a breaking news reporter, working out of the Star’s radio room in Toronto. Follow her on Twitter: @emmarosesandri