Toronto ranks 86 out of 220 cities for rental affordability, with a home price-to-income ratio (HPIR) of 13.9, according to data gathered by Numbeo regarding the 2024 property prices index by city.
The price-to-income ratio is a measure of affordability—a lower house price to income ratio indicates that homes are relatively affordable and more accessible to residents while a high ratio indicates a property market where housing prices are unaffordable.
It a new report it is applied using median apartment prices to median familial disposable income, expressed as years of income.
Numbeo uses the following formula to calculate rental affordability:
- Net disposable family income, defined as 1.5 times the average net salary (50% is the assumed percentage of women in the workforce).
- The median apartment size is 90 square meters.
- The price per square meter is the average price per square meter in the city center and outside of the city center.
Other Canadian cities on the list ranked as follows: Vancouver ranked 54 (with an HPIR of 16.5), Ottawa ranked 105 (HPIR 12.6), Calgary ranked 209 (HPIR 4.7), and Edmonton ranked 216 (HPIR 4.0).
According to a recent apartment rentals report by Rentals.ca, Toronto ranks third in Canada with an average one-bedroom rent of $2,521, which represents a drop of 2.8% from the following month, and a 2.6% increase when compared to the same month the year prior.
“Looking forward to 2024, the rental market in Canada will remain undersupplied but should become somewhat more balanced this year, with rent growth expected to converge towards its five-year average of approximately 5%,” read the report, in part.
Most of the cities in the top 20 of the list are in developing countries where incomes are low. Vancouver is the most unaffordable city for apartment rentals in North America. The first American city on the list is New York City way down at 130th. Paris, France is 45th and London, England is 55th, one behind Vancouver.
Numbeo is the world’s largest database of user-contributed data about cities and countries worldwide. It has been gaining popularity in recent years, with its data being sourced by the UN and World Bank studies, as well as quoted by numerous newspapers, magazines, and blogs.
Its data tends to correlate with other data on the costs of living. For example, a report released last week by the Wellesley Institute’s Thriving in the City series suggests that the annual cost of “thriving” for a single, working-aged adult in the GTA is between $61,654 and $83,680 after taxes.
