Due to an imbalance in the supply and demand of real-estate in Toronto, housing prices in Toronto are at an all-time high. The cost of real-estate is so high that even lawyers can’t afford housing; a law-firm in Toronto considered offering its junior lawyers mortgage subsidies just so they won’t quit their jobs and move to more affordable areas!
The high costs are affecting tenants too; tenants can be asked to pay prices up to $2000 a month for single bedroom apartment in the city. A poll conducted by Toronto Region Board of Trade found that 42% of the respondents intended to leave the city due to soaring housing costs. Despite so many people looking to move out of Toronto, the vacancy rate stands at a mere 1.1%.
Here are a few ways Toronto’s high real-estate prices are affecting its residents:
It’s Preventing Young Couples From Starting Families
Young adults are the key drivers of wealth inequality and growing social stratification in the city. These college-educated individuals secure well-paying jobs and then choose to delay starting a family until they can afford to buy a house. Without the burden of a family, young couples are able to survive the high costs of renting an apartment in Toronto.
It Stunts Upward Mobility
Big cities mean big opportunities. Big cities like Toronto are commercial hot-spots and attract major corporations from all over the globe; they also offer more job opportunities than smaller towns.
With that being said, the salaries offered by these corporations still cannot match the high costs of housing and living in the city. Residents are faced with an opportunity gap; they are forced to choose between good job opportunities in an expensive city or living in a small town that’s more affordable but may not offer the jobs they deserve.
Factors Causing Real-Estate Prices To Rise
So why is housing in Toronto so expensive? Housing in Toronto wasn’t always as costly as it is today. Here are a few of the major factors that are driving housing prices up.
1. The Demand-Supply Problem
The greatest driver of high housing prices in big cities like Toronto and Vancouver is that the demand is so much higher than the supply. These cities offer great job opportunities and draw workers from all over the country and abroad. They also present many investment opportunities from wealthy immigrants. The high demand drives real-estate costs up.
2. Zoning And Housing Regulations
The government further restricts the housing supply by implementing zoning and housing regulations. The cost of building a new house is incredibly expensive because of zoning regulations and charges for housing development. In addition to high prices, there are also many development rules that prevent builders from making new houses.
The government’s aim is to restrict the development of single homes and focus on multi-level housing instead. This way, they can increase the density of the city without expanding it further.
Real-estate studies found that between 2007 and 2016, an average homeowner in Toronto paid an approximately $229,000 extra for their houses due to zoning charges!
3. Homeowners Want Like Restrictions
Homeowners that bought their houses before the real-estate prices spiked strongly support all the new rules and regulations as the cost of their houses also increase with the market-price so they don’t speak out against the government’s regulations.
If you’re looking to for affordable housing in Toronto, find yourself an experienced and informed real-estate agent that’s knows the housing market. Alex Quazi is a seasoned real-estate agent who works in Toronto. He’s passionate about helping people find a dream home in the bustling in the city that suits their needs and fits their budget.