8 January 2019

In other words, if you apply for a mortgage, you need to qualify at a higher rate than you are applying for, even in case you can provide a 20% downpayment in order not to buy a loan insurance.

Although the influence on homebuying activity is clear, renters in Toronto also started feeling the impact, as potential buyers have to rent longer now, increasing the pressure on a tight rent market.

“People still need to live somewhere,” – noted Myers. “It’s not a choice between buying a house and staying with your parents. There are always the situations in between. And as they are not buying, the demand still goes somewhere. It goes to the rent market”.

That’s why Myers predicts a rent increase by 11% in the old city of Toronto for 2019 and by 10% in neighbouring Mississauga.

The recent monthly report made by Myers for rentals.ca shows that the average rent in November for a one-bedroom apartment in Toronto rose by 1% from October and reached $2,144 – right in line with the forecasts.

There are also other factors pushing rents higher: population gains, rent controls, strong job growth and restrictions on the construction of new units. “We’re becoming the victim of our own success,” – he says.

“More people want to live here, large companies expand their offices and create new jobs, but we are not balancing it with the necessary supply”.