Rent reductions haven't eased financial burdens for numerous tenants, as they've decreased food expenditures and increased credit card debt to cover living costs.
The Lowdown on Toronto's Rental Landscape in 2027-28
Hold onto your wallets, Torontonians! Despite recent rent drops, prices still send many renters scrambling for savings, according to the Royal LePage 2025 Canadian Renters Report. Here's the skinny on what's happening in our city's housing market.
Over the past five years, rent prices in Canada have hiked up by an average of 4.1% annually, outpacing wage growth. In a nutshell, it's been a renter's nightmare.
But, why, you ask? Well, it's a combo of factors.
- Developer Drought: Developers are scaling back on housing construction, with the number of new condo projects forecasted to drop dramatically between 2027 and 2028. This reduction in supply, combined with ongoing demand, means prices are likely to skyrocket.
- Market Moves: Despite a recent softening in prices, luxury rentals, like purpose-built apartments and condos, are still pricey. In fact, rents for new units are still relatively high, with only a slight decline compared to existing units.
- Population Push: Toronto continues to attract new urban residents, adding to the demand that the current housing supply can't keep up with.
- Economic Ebb and Flow: The Canadian economy is projected to settle down by '27, but inflation is expected to stick around above the target until 2025. This could push overall living costs, including rent, higher.
- Builder Brain Drain: There are concerns that many construction companies might go belly-up or withdraw from the market in the next couple of years, causing a severe supply shortage and setting the stage for a housing crisis.
So, what's a renter to do? Well, according to a survey, 38% of renters in Ontario are slashing their grocery budgets, dip-diving into their savings or racking up credit card debt to keep a roof over their heads. But don't worry, half of the Ontario tenants surveyed have their sights set on buying property in the future. Let's hope the rental crisis eases up before their dreams of homeownership come true!
Walia, a sales representative at Royal LePage Signature Realty, warns that, while the price of small condos (less than 480 sq ft) may dip, one-plus-dens and two-bedroom units are seeing more demand. So, if you're considering buying a place, you might want to hold out for those bigger units... or just keep renting for a little while longer.
In conclusion, with the developer drought, persistent demand, and a dwindling rental supply, it appears that Toronto's rent prices will remain a burden on renters' wallets well into 2027 and 2028. Buckle up, folks—it's gonna be a bumpy ride!
- In light of the anticipated drop in new condo projects in Toronto between 2027 and 2028, the media is abuzz with news about a potential housing crisis due to the reduction in supply and ongoing demand, which could drive rental prices even higher.
- As the cost of living in Toronto continues to rise, personal-finance experts advise renters to tighten their belts, with 38% of Ontario renters already making sacrifices such as cutting their grocery budgets, dipping into savings, or racking up credit card debt to manage their rent.
- Despite the challenging rental landscape in Canada, some financial advisors suggest that those hoping to buy property in the long term should consider the Toronto real estate market, particularly the demand for larger units like one-plus-dens and two-bedroom units, with the hope that their dreams of homeownership will become a reality before the rental crisis eases up.
