Owning a condo in Hamilton costs 20 per cent more than renting: Zoocasa

Despite falling house prices, it still costs more to buy in Hamilton than it does to rent, a new report has found.

The cost of owning a condominium in Hamilton is nearly 20 per cent more than renting a one-bedroom apartment in the city, according to Zoocasa.

In Steeltown, the average rent for a one-bedroom flat - derived from a handful of property listing sites - hovers around $1,790 a month.

Compare that to the average monthly mortgage payment for a condominium in the city - at an average value of $494,945 - that stands at $2,146.

It's a difference of 19.89 per cent - or $356 a month.

Zoocasa said its average rental prices used in the report were calculated from listings on Zumper.com, TorontoRentals.com and Rentals.ca.

The average condominium prices were sourced from the Toronto Regional Real Estate Board (TRREB), the Canadian Real Estate Association (CREA) and local real-estate data.

The mortgage payment estimations were based on the assumption of a 20 per cent down payment, a 30-year amortization period and a five-year fixed interest rate of 5.14 per cent.

The latest report comes on the heels of a similar study from Ratehub.ca, which found that a would-be buyer in Hamilton would need to make a salary of $167,500 to purchase a home priced at $862,300 in the city.

Speaking to The Spectator, Zoocasa spokesperson Patti Cosgarea said as interest rates continue to rise, it's putting downward pressure" on the price of homes in the province.

Cosgarea said it's having the opposite effect" on the price of rent in Hamilton, which continues to swell due to increased demand from buyers priced out of the market.

And those would-be buyers are now staring down close-to-record-high rent prices in the city, eating away at their ability to save for a down payment and leave the market, she noted.

It's a snowball effect," said Cosgarea, noting that the nearly 20 per cent price gap is also expected to grow if that pattern continues. And it's really affecting Canadians negatively."

Cosgarea said in terms of monthly payments, renting remains more affordable" on a monthly basis, but those looking to get into the market are advised to try and get pre-approved.

For buyers priced out of the market, they have no choice but to stay and save," look elsewhere or adjust their expectations, she added.

It's really a tricky market," said Cosgarea. And it's tough out there."

Across the country

Across all major Canadian cities included in the report, Hamilton came in fifth in terms of the difference of cost between mortgage payments and rent payments.

The largest disparity was in Toronto, where the price difference between owning and renting was nearly 45 per cent - with mortgage payments costing $1,300 more per month.

Meanwhile in Edmonton, it would cost nearly 20 per cent more to rent an apartment instead of owning a condominium.

Fallon Hewitt is a reporter at The Spectator. fhewitt@thespec.com