Canadians are renting luxury condos in Toronto for as much as $2,000 a month

Canadians – wary of waiting until they’re practically middle-aged to buy a home – are flocking to a new generation of luxury buildings where the average rent is $2,000 a month. Could it be…

Canadians are renting luxury condos in Toronto for as much as $2,000 a month

Canadians – wary of waiting until they’re practically middle-aged to buy a home – are flocking to a new generation of luxury buildings where the average rent is $2,000 a month. Could it be the next generation of Vancouver “stuck in traffic”s?

Among Toronto’s congested downtown neighbourhoods, Royal York is luring buyers with a new “slumlord”-style building, built like a permanent residence with permanent residents and no limits on rent.

Most are renting instead of buying or selling their home for the same reasons as in other American cities: bad traffic, sky-high housing prices and student debt.

“The cost of living is definitely pushing people to build rentals,” said Gillian Johnston, head of residential brokerage for commercial real estate company Marcus & Millichap.

Half the tenants at the 164-unit luxury condo building at Royal York Rental tower are young professionals, said building manager Tim Walsh.

Although the newest building is the first to offer dozens of families and seniors accommodations, the standard is not far off traditional rentals in Toronto: rent of $1,985 a month for a studio and $2,190 for a two-bedroom (two people sharing a studio), plus a $1,500 water and sewer fee. By comparison, Toronto’s most expensive apartments are from a mere $1,895 to $3,250.

The building – downtown, a 10-minute walk from the 416, Toronto’s transit ring and 11 miles (18 kilometers) from the gleaming Toronto Centre mall – has some nice features: on-site doctors and a fitness centre; a bike storage room with lockers and an Olympic-sized pool; designated cooking space with a microwave and pasta pot; and children’s clubhouse with a pool table and babysitting facilities.

“With this type of housing, you get more bang for your buck,” said Johnston.

Over the next several years, Marcus & Millichap will invest $650 million in all-condo towers in the Greater Toronto Area, she said.

The price of a suite in the all-condo Royal York building will be comparable to one in high-rise condominiums a few blocks away, said Walsh.

“The difference is that this building is a modern building on a busy street. There’s parking on site, it is on the first floor, it is amenity-rich, there’s no parking lot, there are no on-site services. You aren’t dealing with huge parking spaces,” he said.

The demand for premium rentals has been building in the GTA for more than a decade, said Johnston.

Over the past five years, the number of new condominium apartments in the GTA has averaged 16,000 a year, and there have been 11,000 building permits for condominium apartments issued. The demand continues unabated. With all-condo buildings in the GTA, “there is a massive addressable pool of rentals that is currently underused,” she said.

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