The student struggle for affordable housing
Rent on the rise, bidding wars and a growing demand for property.
Still having thoughts about moving out?
Darlen Poce did everything she was told to do in order to become successful. She went to school, graduated from Humber College in human resource management and she landed a new job at Scotiabank as an employee lifecycle administrator.
But after all she has accomplished, the 22-year-old graduate is still having difficulty with finding a suitable place to move out on her own.
“Honestly, it’s been a little difficult,” Poce said. “I started looking since the beginning of summer, like right after I graduated. I’ve just been kind of looking everywhere, hoping to find something as soon as possible.”
Poce scrolled through the Kijiji posts with no luck. Struggling to find something affordable and functional, Poce clicked on dozens of condo, apartment, and basement apartment listings in her search for her first place.
“It’s been tough, price point wise. It’s been very tough because I don’t know who can afford like, $2,000 a month in rent as a student or as a part-time worker,” Poce said. “That’s for like, a bachelor basement apartment and you have like, one fridge, one stove and that’s it.”
Average rent prices in the GTA recorded in second quarter reports by TREB.
But when it comes to deciding between a location and the price, Poce said it is all about the money.
“I have thought about raising my budget,” Poce said. “It’s doable but not with the job I have now. Definitely not. I would be living paycheque to paycheque, there wouldn’t be any point.”
So, why is Poce having trouble finding a place of her own?
Lily Tran, a real estate agent at Century 21, said that it is becoming harder for people to purchase a house or condo.
“There’s a lot of factors,” Tran said. “Because a lot of people do not have a lot for a downpayment, plus the government sends out different rules for people to purchase and with the interest rate going up, people cannot afford to buy the property anymore. Then they have no choice but to rent.”
Like the prices of everything else this year, something that was once attainable is now out of range for many.
On Oct. 18, the Toronto Real Estate Board (TREB) released its third quarter (Q3) report on the condo rental market. TREB concluded that the average rent for a one-bedroom condo is $2,163, up by 9.5 per cent compared to Q3 2017. A two-bedroom condo in Toronto has also risen in price by 8.3 per cent this year, putting average rent prices at $2,822.
TREB Q3 report.
“This year especially, the prices now are really high, then the rentals are very high in demand,” Tran said. “So it is very difficult for the people that have a small budget.”
This cannot be good news for students and young adults working their part-time jobs or making their starting salaries. Poce calls it “insane.”
“You want to live in a condo downtown Toronto, you’re paying a ridiculous amount of money,” said Poce.
“And then you think that like, I’m going to move outside of the city because Toronto’s where it’s really expensive, then you go outside of the city,” she continued. “Where am I supposed to move? Am I supposed to move to St. Catharines and live over there and drive to Toronto?”
Tran said St. Catharines is actually among one of the best places to go when looking for affordable rentals.
“Toronto is the most expensive, whether it is for purchase or rental,” Tran said. “Mississauga, lately in the past few years, the prices have gone up also.”
Bryan Sperandei has been a Mississauga landlord for the past three years and said that these more “active” cities attract the most demand.
“I’ve noticed this year there seems to be more demand,” Sperandei said.
“Even three years ago when we first got these places…there was a lot of demand, but it seems to have skyrocketed this past year. Now, if I’m putting up a posting or an ad, it’s literally a matter of hours before I’m getting lots of responses pouring in,” he said. “I can [post a listing] within a week of when I want it rented and it seems to work out.”
Sperandei has rented out both of his properties this year and says the bidding wars were nothing like he had ever seen before.
“Usually, I expect some bargaining to get the place for a little bit less, instead this was the opposite,” he said.
With the increasing demand and relentless competition, it is easy for students and millennials to get lost in the mix of it all. So, what can be done to make an application stand out?
Tran said there are five things to think of when applying for a tenancy:
- First of all, you need a good credit score. Have a copy ready to submit along with your application.
- Then you need to have a full-time job. An employment letter or pay stubs show that you are maintaining steady hours and making money in order to pay your rent. Bonus: reference letters are good for proof of your character.
- Having a lump some of money in your account shows that you are able to pay on time. Tran’s advice is to have at least six months worth of rent in your bank account.
- Get a guarantor. This can be a parent, family member or close friend, someone who will co-sign your lease to guarantee all that is listed in the lease agreement.
- Bump up the asking price. But only if your budget is flexible.
Unfortunately, Tran said that although a student’s rental application may seem appealing, there is still a hesitation to rent out to young people.
“Landlords do not feel safe because maybe they’re thinking the student is not mature enough,” she said. “They worry about damaged property, plus [students] don’t have job security for the payments.”
Tran said that students or those who have just graduated should look into different types of living spaces like renting someone’s basement or a room in their house and to stay away from downtown.
Sperandei, on the other hand, does not care whether his applicants are students or raising a family.
“To be honest, it also comes down to just a personal vibe I get from the person,” he said. “You’re going to be dealing with these people in the future, so you just want someone who you can get along with.”
For more information about rent prices in Ontario, try the map below.