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We see them all over the city: luxury homes decorated and rented, often at extraordinary monthly rates.
But who lives there? Why, if they have that kind of cash, do they rent? And how do they fit into the overall health of the Toronto housing market?
Expensive single-family homes are rented by a variety of clients, according to Toronto realtors. Daniella Gold of Harvey Kalles Real Estate Brokerage said airline executives are often regular buyers of these types of properties.
“There are people who work for companies that send them to Canada, where they usually pay for accommodation,” Gold said. “So it’s definitely one.”
This type of rental is essential to attracting top talent to the city, according to James McKellar, professor of real estate and infrastructure at the Schulich School of Business at the University of York. “It improves job mobility at the high end,” he said.
Erica Reddy-Choquette, a registered broker at Royal LePage Signature Realty Erica Reddy Brokerage, has also seen families renovating expensive homes rent high-value rentals temporarily while their permanent residence is remodeled.
“Someone in a high-end home, who’s doing a high-end renovation, will generally be looking for a high-end rental to live in in the interim,” Reddy-Choquette said, pointing to families who have sold luxury homes and are looking to reduce its size. They also tend to buy these types of rentals.
These rentals are necessary to prevent your tenants from buying in low-end markets, according to Mandy Hansen, director of Insight Specialty Consulting.
“It’s like walking into a Louis Vuitton store and complaining that the bags are too expensive,” Hansen said. “They are, but that’s the market.”
When it comes to handbags, there are plenty of affordable options on the market if Louis Vuitton is out of your price range. However, the housing market is not the same, Hansen noted.
Jessica Bell, a critic of the housing opposition, agrees.
“The Toronto real estate market needs to be able to offer rental options for people of all income levels,” said Bell, NDP MPP for University-Rosedale. “From high income to middle income to lower income.”
However, while those with higher incomes tend to have many more housing options available, those at other levels have to struggle, he says.
According to Toronto’s 2021 Vital Signs Report, more than 11 percent of apartments that rented for more than $ 2,550 per month last year were vacant compared to 0.6 percent of vacant units that were rented. for less than $ 625 a month.
Data from Canada Mortgage and Housing Corp. shows that almost all vacant units are not affordable for the bottom 40 percent of the population, who cannot support more than $ 1,174 in rent.
“People from principals to teachers to baristas to delivery workers have a hard time finding a stable home,” Bell said, noting that those with the lowest incomes face the greatest difficulties.
To counter that high vacancy rate for more expensive rentals, the NDP has filed a motion calling for a province-wide two percent vacancy tax applicable to homes left vacant for more than six months out of the year, with the money redirected to affordable housing construction. , the same type of tax proposed by other levels of government.
The City of Toronto recently asked residents for their opinion (via survey) on a vacant home tax designed to influence homeowners to rent or sell their vacant residential space. Mississauga is considering implementing a similar tax, Ottawa will have one by 2022, and Vancouver has i had one since 2017.
At the federal level, a one percent tax on foreign-owned homes, which would take effect on January 1, has also been introduced into Canada’s budget.
The only way to lower the cost of high-priced rents, according to Kellar, or keep prices from going up, according to Hansen, is to build more affordable housing in the city.
“If we choose not to allow housing to be built, then supply and demand will rule and become more expensive,” Hansen said.
Reference-www.thestar.com