If you’re looking to buy a condo, the best value may be found in the East York area, according to a new analysis of the Toronto real estate market by brokerage Zoocasa.
Of 35 real estate districts in the city, the East York and Danforth Village district offers the lowest price-to-rent ratio, Zoocasa found.
In other words, the average purchase price ($434,196) is low enough and the average monthly lease rate ($2,415) is high enough that it’s economically more feasible to buy than to rent there. Simple math shows it would take only 15 years of paying rent to make up the purchase price, 15 being the calculated price-to-rent ratio.
All other neighbourhoods with low price-to-rent ratios fall into the Scarborough and northwest Toronto suburban areas.
At the other end of the scale, in the Rosedale and Moore Park district leasing may present the best value. The Zoocasa study shows the highest price-to-rent ratio. With a purchase price of $1,303,658 and a $3,143 monthly lease, it would take 35 years of paying rent to cover the purchase price.
Also in the best-to-buy category are the areas of York Mills, Bridle Path and Hoggs Hollow with a ratio of 34; Leslieville, Riversiode and Little India with a ratio of 33; and Yorkville, Annex and Summerhill with a ratio of 31.
This follows a Zoocasa report a week earlier showing the availability of condominiums leases in Toronto neighbourhoods, based on data from the Toronto Regional Real Estate Board.
Leaside and Beaches
In that report, the district including Leaside, Thorncliffe Park and Flemingdon Park ranked highest in the growth of condo leases available in Toronto. However, the Leaside area is right in the middle of the price-to-rent ratio rankings, ranked 17th with a ratio of 21.
The Beach and Upper Beaches neighbourhood is ranked 26th with a price-to-rent ratio of 24, making it also an area in which it may be better to rent than buy.
Of course, there are other factors to consider when deciding whether to buy or rent, Zoocasa warns.
“For example, the benefits of purchasing a home include the pride of home ownership and potential appreciation in the value of the property over the long term. On the other hand, renters have more flexibility to move, don’t have a large amount of equity tied to one asset, and less responsibility for home maintenance and repairs.”
Prospective buyers and renters should consult with a professional to help determine what best meets their needs, the report says.