The Greater Toronto Area is carving out a strong position as a major home for the technology sector and that’s helping to drive housing demand.
With immigration in the region increasing – as major tech names move in with the promise of high-paying jobs for young workers – demand for rental homes makes the market attractive to investors.
A report from Marcus & Millichap shows that investor sentiment pushed transaction velocity 17% higher over the trailing 12 months ended in March in comparison with the prior period.
There has been a 2.9% growth in employment in the first quarter of 2019, with 52,600 jobs created, but with home prices and the mortgage stress test making homeownership a challenge for many, rentals are in demand.
The report calculates that renting is a more affordable option with average rent up 4.7% in 2018 to $1,370 per month. Meanwhile, the average monthly mortgage cost for a benchmark $873,100 would cost around $2,000 more.
New rental units have been added to help meet demand with vacancy rates staying doggedly low at below 2% for 8 years.
Elevated investor interest contributed to a 3% increase to the average price, climbing to $268,400 per unit over the past 12 months.