Renters and Homeowners Face Narrowing Gap in Monthly Payments, Brampton Rental Prices Soar
According to a recent report by Zoocasa.com, the disparity between rental and mortgage payments in the Greater Toronto Area (GTA) continues to decrease, with Brampton emerging as one of the most expensive cities to rent in. In the first quarter of 2023, the average rental price in Brampton reached $3,263 per month, while the average mortgage payment for a $1,000,000 home stood at $4,626—a difference of just $1,363.
Interestingly, the average home price in Brampton is actually $1,113,948, implying that renters could be paying approximately $1,900 less than homeowners on a monthly basis. The report highlights that while the Canadian rental market has experienced slower growth recently, homeownership affordability has become more challenging, particularly in the first half of the year. This tightening of affordability is anticipated to impact rental prices, potentially driving them up once again in the coming months.
Given the prospect of rising rents, prospective homebuyers may be questioning whether it is more financially viable to rent or buy a home and make monthly mortgage payments. However, with starter homes now surpassing $530,000 in Brampton, some renters may find themselves unable to attain homeownership unless wages and home prices begin to align.
Nevertheless, Zoocasa cautions against solely considering the current numbers when deciding between renting and buying. Apart from the advantage of building equity in a owned property, it is crucial to account for the fact that mortgage payments are rising due to heightened interest rates.
Although the higher average rent in Brampton during the first quarter of the year might shock some, rental prices in the city appear to be improving on a month-to-month basis. In June, Brampton maintained its position as the 9th-most expensive city in Canada for the second consecutive month, dropping from 13th place in May, according to Rentals.ca. Notably, Brampton ranked second among cities with the fastest annual rent growth, experiencing a 25.8% increase.
Conversely, Orangeville emerged as the most affordable city in terms of mortgage payments, with a monthly average of $3,920 for a house priced at $847,527.
Overall, the evolving dynamics between rental and homeownership costs in Brampton underscore the need for careful consideration when making housing decisions. While renting may appear more favorable in the current climate, the potential benefits of building equity and the influence of interest rates should not be overlooked.