Toronto is the fourth largest metropolitan city in North America only behind Mexico City, New York and Los Angeles. It is also one of the fastest growing cities in North America as witnessed by the number of condominium developments that are ongoing at the current moment. At one point, Toronto had almost as many high rise construction projects as those in all of North America.
With the growing popularity of living in Toronto, the cost of living has actually risen substantially from the past. Everyone knows that living in a large, popular city has it’s benefits, but the costs can sometimes be prohibitive.
More recently a study was done by Notable.ca on how much it would cost a young professional to live in the city of Toronto. The study (found here) broke down six major categories: housing/utilities, transportation, groceries, dining out, drinking and health and fitness. Note this is for young, single professionals and not the family types.
So what did this study really find?
Health and Fitness:$55.06
(numbers taken from Notable.ca article)
What the article didn’t touch upon were two things. You cell phone bill. Which for many can range anywhere from $50-100 and the fact that many young professionals choose to own their own place rather than renting. Who likes paying for someone else’s mortgage anyways?
Most young professionals choose to live in condominiums over owning an actual house. There isn’t the need for so much space for a single individual and of course the price of owning a home is much higher. As of August 2015, the average condo in the City of Toronto had reached $406,587 according to CREA. That’s no small number to sneeze at.
So assuming a 10% down payment and a 25 year amortization with rock bottom 2.5% 5 year fixed rate mortgage the total monthly payment for an individual would be $1639.24. This doesn’t include any closing fees, lawyer fees and land transfer taxes.
An average condo in Toronto for a single professional wanting a one bedroom would roughly be the size of around 650 sq ft. Most condos have swimming pools, private gyms and party rooms that can be used by all residents at the building. Condo fees, which pay for all these amenities, are popular and mandatory for condo owners and usually range around $0.65/sq ft. That would make the monthly payment for condo fees around $422.50.
On top of the condo fees would be the standard property taxes that are levied by the City of Toronto for the public services and infrastructure that they provide for the community. The cost of property taxes on a property assessed at $406,587 would come out to an estimated $2,868.89 based on the City of Toronto property tax calculator. This is the equivalent of $239.07 a month.
After those payments, the average utility bill that a young professional would face would be around $149.92 a month as provided by the Notable.ca study.
Want to renovate that kitchen or the bathroom? Perhaps you need to change the appliances after a few years and things start to break down. These are all expenses that a home owner needs to save for since there is no landlord available to replace these major appliances. Costs could average up to $50.00 a month over the long run to replace so many appliances.
With all those expenses added up, the cost to own your place rather than rent would now equate to $2,500.73. So the dream of everyone is to own their own place and live in Toronto.
Health and Fitness:$55.06
Just to get by each month without saving anything into your bank account or buying extra luxuries one would have to make $49,300 a year assuming standard income taxes are paid. This means that if you’re just starting out you might have to save up a few years and get yourself into a better financial situation before tackling home ownership.
Best City In The World
It takes quite a lot of money to own a place and just like the Notable article this doesn’t include those other expenses like coffees, haircuts, clothes, or furniture that you’ll need to buy to furnish your condo. That aside this study still provides for those outing with friends after work or enough to get by in a relationship.
There are sacrifices that you might have to make if you want to live in Toronto. But heck, if you want to live in the best city in the world there’s a price you’ll have to pay.