The Cost of Renting in Toronto and a More Friendly Cottage Market for Buyers

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Every Friday, Wahi brings you the most important real estate stories from the past week.

Toronto’s Skyrocketing Rents Slow as They Reach Outer Atmosphere

After soaring to new heights, a new analysis finds that Toronto rents are increasing at a slower pace. That doesn’t mean the city is suddenly affordable — it still takes a six-figure salary to comfortably rent a one-bedroom, which averages $2,538  per month, according to the study by Urbanation — but that’s only half a percent higher than April’s average of $2,526. Two-bedroom units, meanwhile, saw an average rent of $3,286 in May. While rent increases are slowing, prices are still up 15.5 from last year, and experts are worried that housing costs are rising too fast for wages to keep up.  

Assessing the Damage from Last Week’s Rate Hike

Last week’s rate hike was only a quarter of a percent, but the unexpected increase sent shockwaves through the housing market. Brokers and agents reported a brief slowdown in showings as buyers and sellers absorbed the news, which will likely be followed by a buying frenzy as Canadians rush to purchase before their preapproval rate expires. As for existing borrowers, variable rate holders now face a 22-year high prime rate of 6.95%, or $15 extra per month for every $100,000 of mortgage debt. Fixed rate holders, meanwhile, could see their payments increase by up to 40% upon renewal.     

Housing Supply Outpacing GTA Population Growth   

Home prices in Toronto remain unsustainably high thanks to a significant disparity between supply and demand, but a new report suggests the gap may be narrowing. According to a recent study by Statistics Canada, housing stock increased by 3.5% between 2019 and 2021, while population growth only increased by 1.3%, giving some hope for a more balanced housing market in the future. The study also demonstrates an evolution in residential life in Toronto, with half of the growth attributed to new condos, and more new row houses hitting the market than new detached homes.       

Cottage Country Correction        

Dreams of lakefront living inched closer to the realm of reality last month following a jump in new listings, according to a report from the Canadian Real Estate Association Lakelands Association of REALTORS. Lakelands North, a region that includes Muskoka, reported 595 new residential listings in May — 6.4% more than last year. All told, there were 852 active listings in May, up 57.2% from April. While prices in the region increased 4.7% in the last year — averaging about $1.12 million — sales volumes of waterfront properties are down 24% compared to May 2022, potentially signalling a more friendly market for buyers.