Toronto renters have it tough across the board as affordability continues to worsen, but unsurprisingly, it’s the younger generation that’s shouldering the biggest financial burden.
Torontonians under the age of 30 are, on average, spending 49 percent of their income on rent. Conventional wisdom in the personal finance world dictates that you should spend no more than 30 percent of your income on housing costs, so it’s safe to say the under-30 crowd is significantly overshooting that mark.
The survey data that illuminates the plight of young Toronto renters was provided by Avison Young and Informa Exhibitions to Rentals.ca and Bullpen Research and Consulting for their September National Rent Report released earlier this month.
Housing Market News Alerts
Sign up for news alerts on the Toronto housing market
It’s true that 20-somethings are typically finishing up school, entering the workforce and only beginning to climb the career ladder. Ideally, their wages will rise as they advance in their careers and their housing costs will eventually eat up a smaller proportion of their income.
However, according to the Avison Young and Informa Exhibitions data, the story isn’t much more encouraging when looking at the entirety of Toronto’s renter population. The survey found that Toronto tenants spend 42 percent of their income on rent, the highest among the 30 Canadian cities included in the Rentals.ca and Bullpen-produced report and still well above the 30 percent housing cost guideline.
The report found that the average monthly rent for a one-bedroom rental unit in the City of Toronto was $2,330 in August. During the same period, renters could expect to shell out $2,904 for a Toronto two-bedroom unit.
Rentals.ca data also showed that prospective tenants have a clear preference for downtown Toronto rental units where prices are highest. But even units in the city’s inner suburbs are posting exorbitant monthly rents that are higher than what landlords are asking for in similarly pricey cities like Vancouver.
A one-bedroom unit in Etobicoke was hitting the rental market for $2,020 in August, slightly higher than the average Vancouver rent of $1,973.
For comparison’s sake, the average one-bedroom rent across all 30 cities covered in the Rentals.ca research data was $1,447 with Gatineau and Quebec City both posting the lowest monthly rental cost at $890.