Who rents a house for $ 9,000 a month? What Premium Rentals Are Saying About Toronto’s Housing Market
A 3 bedroom house in Riverdale for $ 5,000 a month. Modern $ 9,950 per month accommodation with large cathedral ceilings near Casa Loma. A Wychwood residence tucked away steps from Hillcrest Park for $ 6,980 per month.
We see them all over town – upscale homes decorated and rented out, often at extraordinary monthly rates.
But who lives there? Why, if they have that kind of money, are they renting? And how do they fit into the overall health of the Toronto housing market?
Expensive single-family homes are rented by a range of clientele, according to Toronto real estate agents. Daniella Gold of real estate brokerage firm Harvey Kalles said senior executives are often regular buyers of these types of properties.
âThere are people who work for companies who send them to Canada where they usually have paid accommodation,â Gold said. âSo that’s definitely one. ”
This type of hire is key to attracting the best talent to the city, according to James McKellar, professor of real estate and infrastructure at the Schulich School of Business at York University. âIt improves the mobility of the workforce at the high end,â he said.
Erica Reddy-Choquette, Chartered Broker at Royal LePage Signature Realty Erica Reddy Brokerage, has also seen families renovating expensive homes temporarily renting expensive homes while their permanent homes are being renovated.
âSomeone in an upscale home doing an upscale renovation will usually look for a high end rental to live in in the meantime,â said Reddy-Choquette, noting families who have sold luxury homes and are looking to downsize. also tend to shop for these types of rentals.
These rentals are necessary to prevent their tenants from shopping otherwise in low-end markets, according to Mandy Hansen, director at Insight Specialty Consulting.
âIt’s like walking into a Louis Vuitton store and complaining that the handbags are too expensive,â Hansen said. âThey are, but that’s the market. “
When it comes to handbags, there are plenty of affordable options on the market if Louis Vuitton is out of your price range. However, the housing market is not quite the same, Hansen noted.
Opposition housing critic Jessica Bell agrees.
âThe Toronto housing market needs to be able to offer rental options to people of all income levels,â said Bell, NDP MP for University-Rosedale. âFrom high incomes, to middle incomes, to low income levels. “
However, while those with higher incomes typically have many more housing options available, those at other levels must struggle, she says.
According to Toronto’s Vital Signs 2021 report, over 11% of apartments rented for more than $ 2,550 per month last year were vacant, compared with 0.6% of units left vacant that were renting for less than $ 625 per month .
Data from the Canada Mortgage and Housing Corporation shows that almost all vacant housing is not affordable for the poorest 40 percent of the population, who cannot afford more than $ 1,174 in rent.
âPeople from principals and teachers to baristas and delivery people are struggling to find stable housing,â Bell said, noting people with low incomes were the most in difficulty.
To counter this high vacancy rate for more expensive rentals, the NDP introduced a motion calling for a 2% provincial tax on vacant homes applicable to homes left vacant for more than six months of the year, with the money being redirected to the construction of affordable homes. , the same type of tax proposed by other levels of government.
The City of Toronto recently asked residents for their opinion (via a survey) on a vacant home tax intended to encourage homeowners to rent or sell their unoccupied residential space. Mississauga plans to put in place a similar tax, Ottawa will have one by 2022, and Vancouver has had one since 2017.
At the federal level, a one percent tax on foreign-owned homes – which would come into effect on January 1 – was also introduced in Canada’s budget.
The only way to lower the cost of high-priced rentals, according to Kellar, or to keep prices from getting more expensive, according to Hansen, is to build more affordable housing in the city.
“If we choose not to let housing build, then supply and demand will prevail and it will become more expensive,” said Hansen.