Take heart, Vancouver residents who complain about sky-high housing prices and the cost of West Coast living: it’s now more expensive to reside in Toronto.
Rising rents driven by a tightening rental market vaulted Toronto to No. 59 on the Mercer 2011 Cost of Living Survey, ahead of Vancouver, which is in 65th spot. In last year’s ranking, Vancouver was in 75th spot and Toronto was No. 76.
The cost of rental accommodation is a major component of the annual survey, and vacancy rates in the two cities have been moving in opposite directions.
Vancouver’s vacancy rate in April was 2.8 per cent, up from 2.2 per cent a year earlier and above the 10-year average of 1.3 per cent, said CMHC analyst Richard Sam. In Toronto, the vacancy rate was 1.6 per cent in April, down from 2.7 per cent a year earlier.
Those trends were reflected in average rent hikes in both cities. Toronto logged a three-per-cent average rent increase on existing units, nearly double Vancouver’s 1.6-per-cent average rent hike.
As of April 2011, Toronto residents paid an average apartment rent of $1,045 a month, compared to $989 for Vancouver residents.
Factors driving vacancy rates up in B.C. included renters moving to home ownership, people leaving for better job prospects elsewhere and a decrease in migration to the province, Sam said.
“Interprovincial migration was down and it was down on the international side as well, and that has an effect on vacancy rates,” he said.
In Toronto, strong immigration, a buoyant economy and declining demand among first-time homebuyers helped push down vacancy rates, he said.
“The increase in average rents was driven by economic and migration factors, which are stronger in Toronto than in Vancouver,” he said.
The Mercer survey tracks expenses such as rents, food, transportation, household goods and clothing in 214 cities in five countries. Real estate prices are not directly included in the rankings, which governments and multinational companies use to determine compensation allowances for expatriate employees.
Mercer hires a real estate brokerage and relocation agency in each city to gauge the local rental market, said Luc Lalonde, Mercer principal.
One factor lifting the rankings of all four Canadian cities in this year’s survey was the surging loonie. New York is the base city for the survey and the U.S. dollar is the benchmark currency, so Canadian dollar strength increases the comparative cost of goods in Canada.
“The currency played an important role in why Canadian cities jumped in the rankings,” Lalonde said.
Calgary cracked the top 100, jumping from 109th to 96th. Montreal moved from No. 98 to No. 79, while Ottawa moved ahead 22 spots, from 136th to 114th.
Because of its record high accommodation costs, the Angolan capital of Luanda topped the list for the second year, with Tokyo and N’Djamena, Chad in second and third place.
The Top 10 includes only three European cities with Moscow at No. 4 and Switzerland’s Geneva and Zurich at Nos. 5 and 7.
London, ranked at 18, is the most expensive city in the United Kingdom, followed by Aberdeen, Glasgow, Birmingham and Belfast.
1. Luanda, Angola
3. N’Djamena, Chad
6. Osaka, Japan
9. Hong Kong
10. Sao Paulo, Brazil
11. Nagoya, Japan
12. Rio de Janeiro
12. Libreville, Gabon
15. Oslo, Norway
16. Bern, Switzerland
By James Kwantes, Vancouver Sun