Here's how much money you need to earn per year to afford rent on a Toronto apartment
Renting a place to live in Toronto is unequivocally cheaper than buying a home in Canada's biggest city. This holds true right now, at this moment, regardless of which option makes more sense financially in the long run.
With the average price of a detached house now sitting at $1,710,304, most first-time buyers can't rustle up enough cash for a down payment, let alone for a down payment plus monthly mortgage costs, utilities and taxes.
And so we rent, because that's the only option left (without leaving Toronto entirely) for young people who don't already own property — but while renting may be the more affordable option, it's nowhere near actually affordable for a great deal of the population. Not anymore.
To wit, a new analysis from The Globe in Mail shows that you'll now need a six-figure income to rent a two-bedroom apartment in the 6ix.
"With the average home price in Canada hitting a record $748,450 in January, Canadians in many parts of the country may find the math of buying versus renting makes for a compelling argument in favour of renting," reads the Globe piece.
"But another part of the renting equation is likely stumping a growing share of tenants: the comparison between market rents and their own incomes."
Using rent price data from rentals.ca, as well as various provincial utility services (only hydro and heating,) the newspaper calculated exactly how much someone would need to pull in per year to afford both a one-bedroom and a two-bedroom unit in 11 major Canadian cities.
The results are broken down in two different ways — the first looks at how high an annual household income would have to be for someone to live affordably, as defined by the Canadian Mortgage and Housing Corporation (CMHC).
"In Canada, housing is considered 'affordable' if it costs less than 30 per cent of a household's before-tax income," reads the CMHC's website.
"Many people think the term 'affordable housing' refers only to rental housing that is subsidized by the government. In reality, it's a very broad term that can include housing provided by the private, public and non-profit sectors."
By the Globe's calculations, a renter would need an annual before-tax salary (or multiple combined salaries) of $118,000 to afford a two-bedroom apartment in Toronto, based on an average rental price of $2,715.
This is just slightly above the average before-tax household income of $109,480 (as of 2018) in Toronto.
To afford a 2-bedroom apartment in Toronto, Vancouver and Victoria you need to make more than $100k annually. Average household income is $62k.— Christine Duong (@christineduongg) February 16, 2022
We need more housing, more protection for renters, and incentives to build affordable housing. https://t.co/pqIRbuhHNt
For a one-bedroom rental, the household income required would be around $90,000, though again, it's important to note that this figure would allow someone to spend no more than 30 per cent of their total income on housing.
People can rent an average $2,013 one-bedroom condo in Toronto while making less than $90K, they just also might have to skimp on food, clothing, savings, entertainment, travel and other basic expenses to survive.
The analysis also includes required incomes when broken down by another general rule that "suggests renters should ensure their fixed costs – including but not limited to rent and utilities – are no more than 55 per cent of their after-tax income."
By this metric, one would need to make about $64,000 per year to afford a one-bedroom rental, or $86,000 for two bedrooms, plus utilities, tenant insurance, cellphone, broadband internet and a $10 per month streaming service.
The good news is that roommates exist, should you need more than one income to meet the requisite number for affordable housing. You could also move to Regina, Saskatchewan, where a two-bedroom renter need only make $55,000 to Toronto's $118,000.
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