Cost of living in North America's 4th largest city

First of all, many people especially Americans would be surprised to learn that Toronto, Canada is the 4th largest city in North America. It is in population and size, similar to Chicago. We also share some of the same problems plus we have some of our own.

The ability buy a home or to rent has grown out of reach for most Canadians wanting to live in the city of Toronto. With the average home now selling for $1.2 million, this places it out of reach of the first time home buyers, who help keep our economy going. Lucky for those who decide to go into debt on such a purchase, interest rates remain at a historic low. But should they start to rise, many new home owners would be forced into a sell position, as they could not afford the mortgage payment on top of everything else. (I have discussed hydro rates in previous blogs).

In the east end of the city where homes where built in the late 1950's at an asking price of $12,000, now sell for $700,000. These are humble bungalows with approximately 1100 sq. feet of space. Where else other then New York city would such properties bring such prices. And if your considering anything in the downtown core, well for a century home plan on spending 1-2 million dollars.

The real sad part of this is many of the homes which have been purchased sit empty. Not even an attempt to rent them out for income, which would help the rental market so much. Having said that, renters are seeing their monthly rents increase as much as 100% with little warning. And it is pay up or move out. There is no rent control on properties built after 1991, so the sky is the limit in this small supply rental property market. Again though, many condo units and homes sit empty as foreign investors and local speculators wait on the prices to continue to rise so they can flip for an easy profit.

Local and Provincial governments meet as I write this, trying to find solutions to reduce the heat of the housing market, reduce the prices and prevent or reduce the empty units which exist in the city of Toronto. Their answers are typical of government. Tax and new taxes. Tax on foreign investors, tax on properties which remain vacant and I am sure they are thinking of a few others.

I admit I don't have the answer, but I just know pricing people out of being able to live in Toronto is not a good thing for anybody.