Here's where a monthly mortgage costs less than rent in the GTA
As the cost of rent in the Greater Toronto Area skyrockets, the average price of a home has been slipping.
According to the most recent Bullpen Research & Consulting and TorontoRentals.com Toronto GTA Rent Report, the average monthly rent in the GTA hit $2,403 in June, an annual increase of 19%.
Meanwhile, the Toronto Regional Real Estate Board (TRREB)’s latest Market Watch report reveals that, while the average selling price of a home in the GTA was up 1.2% annually in July — to $1,074,754 — prices were down 6.2% month-over-month.
To determine where in the GTA it’s best to rent and where you’d be better off buying, Zoocasa compared the most recently available June rental prices and July home prices.
Average monthly mortgage payments were calculated assuming a 20% down payment, 30-year amortization, and a five-year fixed interest rate of 4.49%.
The real estate agency focused its efforts on condos, as demand for the property types has increased significantly. Based on TRREB data, condos are the second most in-demand property type in Toronto and the GTA, second only to detached homes.
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The GTA has seen two consecutive months of “outsized” rent growth — prices jumped 3.1% month-over-month in July and 5.7% in June. Meanwhile, condos are currently the most affordable property type across the region.
But, despite rising rents and falling prices, it’s only more affordable to buy a condo instead of renting one in two GTA cities.
In Mississauga, the average rent for a condo is $2,820 per month, while the average monthly mortgage payment costs $2,531. There is, of course, an additional $628,116 needed to buy the average condo in the city, but buyers would save 10.2% every month thereafter.
In Oshawa, the average monthly mortgage payment for a condo ($1,529) is 14.4% less than the average monthly rent ($1,787). The average sale price of a condo in the city is $379,510.
Conversely, renters in Toronto and Brampton save an average of 9% and 9.7%, respectively, per month. However, Zoocasa notes that the price differences in the cities are “relatively small,” and, with rent expected to rise further, buying may result in long-term savings.
In Oakville and Vaughan, though, the cost of buying a condo and the associated monthly mortgage payments far outweigh the price of renting.
The average rent for a condo in Vaughan is $2,224 per month, while a monthly mortgage runs 25% more, at $2,784. Vaughan’s average condo price — $690,996 — is the fourth-highest in the GTA.
In Oakville, renters save a staggering 59% every month. The average rent for a condo in the city is $2,384, compared to $3,781 for a monthly mortgage. At $938,359, Oakville has the most expensive condos in the GTA.
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