If you’re looking to buy a home and are completely priced out of the downtown Toronto core, you’re probably taking a gander at properties located in the outskirts – somewhere in a more affordable area where the sale of a home won’t burn a hole in your wallet. Turns out, suburban areas may not be all that cheaper, especially when you factor in the cost of driving or commuting in the Greater Toronto Area (GTA).
According to a new study released by the Canada Mortgage and Housing Corporation (CMHC), while the cost of living in the suburbs may bring savings on housing, the cost of a long commute outweighs the overall savings from cheaper housing in the suburbs. “What became apparent is that the cost of commuting from the suburbs eats into savings on housing,” reads the report. “In fact, for some suburbs, commuting costs making living there more expensive than living in the city of Toronto.”
Commuting costs (public transit, parking costs) can vary region-to-region. It can range anywhere from $100-200 a month in the city of Toronto, to over $800 a month in Halton Hills. For closer suburbs like Mississauga or Markham, the cost of commuting can be anywhere between $200 and $400 a month. While there are many benefits for living in the suburbs like affordable housing, larger property sizes, slower pace, and varying lifestyle there remains a trade-off for suburban commuters in the form of longer commutes. According to the study, between 2011 and 2016, the average duration of commutes increased. In addition, the fastest growing segment among commuters is those who travel over an hour for work; this can add the equivalent of over an additional work day per week. “The average hourly wage in the GTA is $26.74,” reads the report. “If we were to assume that individuals value their time at its market rate, then commuting can result in a very significant cost for individuals living in the 905 area and working in the city of Toronto.”
In the end, what do you value more? Location? Lower home costs? Additional time? Convenience? These are some of the many factors prospective home buyers should consider when looking to invest in a property. You may think you’re saving money if you move out to the suburbs, but if you’re still commuting to the downtown core for work, how much are you really saving?