The cost to rent an apartment is still cheaper than an average mortgage payment in most Canadian cities, according to a brokerage Zoocasa.
In a post published by the brokerage on Monday, it states average monthly rent is still less expensive than monthly mortgage payments for a condo in 11-out-of-15 major Canadian cities.
For example, the average price of a condo in Toronto is $769,058, with an average monthly mortgage payment of $3,335. That’s still 44.81 per cent more expensive than the average monthly rent for a one-bedroom apartment in Toronto ($2,303), Zoocasa states.
“The rise in demand for rentals is reflected in the housing market; in September of last year when interest rates were low, there were 9,046 sales across the GTA,” Daniel Crook, author at Zoocasa, said in the post.
“This September, we were down to 5,038, a decline of 44 per cent. With that higher cost of borrowing, some are considering rentals as a more financially sound option.”
The only major cities where monthly mortgage payments are actually cheaper than rent are in Western Canada. The average monthly mortgage payment in Edmonton is $954, which is 19.22 per cent less than the average rent of $1,181.
Calgary’s average mortgage payment is $1,205, which is 18.58 per cent less than the average rent of $1,480. In Winnipeg, the average mortgage is $1,152, which is 12.33 per cent less than an average rent of $1,314. Saskatoon’s average mortgage is $949, which is 11.39 per cent less than the average rent of $1,071.
HOME SALES SLOW
On Wednesday, Statistics Canada reported the price of other owned accommodation expenses, which includes the commissions on the sale of real estate, rose at a slower pace in September (5.8 per cent), than in August (7.4 per cent).
The organization also found that the homeowners’ replacement cost index, which looks at the price of new homes, increased slightly in September (7.7 per cent), which was lower than the 8.4 per cent rise in August.
“These movements reflect a general cooling of the housing market,” the report said.
Methodology for Zoocasa
“Rental prices. Average rental price for one bedroom units courtesy of Zumper.com, TorontoRentals.com and Rentals.ca. The average price of condo apartments is sourced by TREEB, the CREA MLS Home Price Index, and local real estate board data.
Mortgage payments. The average monthly montage payments were calculated using RateHub.ca’s Mortgage Payment Calculator, assuming a 20 per cent down payment, 30-year amortization, and a 5-year fixed interest rate of 5.14 per cent.”