Toronto renters need to work almost 180 hours per month to afford an apartment
As inflated as the home-buying market has become, Toronto renters are also feeling the heat on their bank accounts. And it's only getting more expensive to live in the country's largest city, according to the latest Rental Market Report released by Canada Mortgage and Housing Corporation (CMHC) Friday morning.
Toronto is the only major Canadian city where rental apartment vacancy rates increased in 2021, climbing to 4.4 per cent from 3.4 per cent the previous year, and bucking the national trend that saw vacancies decrease, which the CMHC states is "a partial result of lingering pandemic impacts" in the city.
The city also registered one of the most significant declines in rental growth among Canadian urban centres, mirroring the growing vacancy rate. But that doesn't mean it's gotten any cheaper to rent an apartment in the city.
2021 Rental Market Report highlights: In many Canadian cities, renters will have a difficult time finding affordable options, with those in #BC and #ON centres having significant affordability challenges. pic.twitter.com/irFXFLGq1s— CMHC (@CMHC_ca) February 18, 2022
Nationwide, the Toronto area is home to the second-highest average monthly rent level for two-bedroom apartments, at $1,679, trailing closely behind Vancouver. And new data from the CMHC shows just how many hours of work it will take to afford a unit in the city on average.
'Afford' is really the key word here, defined in the CMHC's report as spending no more than 30 per cent of gross income on monthly rent.
Full-time employment is considered equal to 150 hours of work per month (or 37.5 hours per week), so Toronto (measured by its census metropolitan area) residents would need an average monthly salary of $5,596.67 to meet $1,679 rent at just 30 per cent of income and be classified as affordable. That means you'd need a yearly salary of $67,160.
As of Oct. 2021, the CMHC report finds it will take 178.3 hours of work per month at the average hourly wage in Toronto to afford a two-bedroom apartment at no more than 30 per cent of gross income.
That's considerably more than the 150-hour-per-month metric for full-time employment, and 7.6 hours more than the previous October, where the number sat at 170.7 hours.
And that's honestly a pretty conservative estimate, the CMHC's report covering the metro area and not zeroing in on the much more expensive Toronto proper.
The Globe and Mail recently calculated that a renter would require an annual before-tax salary (or multiple combined salaries) of $118,000 to afford a two-bedroom apartment in the actual 416, based on an average rental price of $2,715 in the city proper.
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