Just One More Thing High Home Prices are Hurting
If you’ve ever searched the local classifieds or trolled the streets of Toronto looking for a place to rent, you know just how hard it can be. Finding a home or apartment to rent is tough; and making sure you’re the top applicant out of all the others having difficulty finding a rental spot can be even tougher. The rental properties have all but dried up it seems, and you can thank home prices that are too high for it.
The concept is simple really. When home prices are too high, people won’t buy. It’s a trend we’ve been seeing over the past several months as sales have dropped month over month, even though prices still continue to climb. With a significant drop in home buyers, that leaves more people searching for places to live, although they’ll pay rent instead of a mortgage. And right now, many trends are coming together to result in a large number of potential renters on the market, and few places for them to rent.
“The rental market is difficult in Canada right now because real estate prices are really high,” says Jodi Gilmour, real estate agent. “In Toronto, the average price of a home is $510,000 and with the necessary 20 per cent down payment, it’s making first-time home buying more difficult.”
And without being able to buy, those first-timers need a place to rent. So too, do empty nesters.
It was widely thought for several years that we’d have an influx of empty-nesters on the market in the coming years. But with the turn the market has taken, and with those empty-nesters not wanting to lose money on the sale of their home or wanting to get gouged on the price of their new home, they’re staying put too. And in fact, many of them are choosing to renovate their home to meet their existing needs, rather than finding a new place that does.
All of that puts pressure on the rental market. And it’s never been tighter in Toronto than it is right now.