Amazon's HQ2 may inflate Toronto rents by this much

by Ephraim Vecina05 Feb 2018

Back in September 2017, Amazon announced its intent to establish a “sister” installation to its Seattle headquarters, and a leading property portal predicted in its latest report that Toronto’s renters might have to pay at least another $137 annually should Amazon push through with building the new HQ in the city.

Just a few weeks ago, Toronto was named among Amazon’s short list of 20 finalists. estimated that such a sister HQ in the city will bring as much as 50,000 highly paid Amazon workers and an assumed 66,250 supplementary workers over a 10-year period.

Consequently, annual rent increases could shoot up to as much as 2.8% to 3.1%.

“This would be mostly driven by the influx of workers with wages higher than the metro median who could afford higher rents, especially given Toronto’s highly competitive rental market and record low vacancy rate,” the report stated.

“The other factor to consider is the total housing supply available for the population growth from the workforce expansion, but as luck would have it, Toronto maintains a healthy ratio of new jobs to housing starts.”

Read more: Grave chill permeates the Toronto housing market

“The projected rent increases would not impact the market equally — some neighbourhoods could see even bigger jumps depending on the final location that’s selected for the HQ. With Toronto’s record low vacancy rates, it becomes difficult to calculate the upward rise of rents. Of course, there would be no immediate impact for those properties that fall under rental control regulations” the report added. noted that these projections have precedent in Seattle’s prices, which saw a rent increase of around 3% since the first Amazon headquarters was established in the city.

However, “the numbers did see a slight drop in the last month of 2017. According to data from Zillow, Seattle’s rents grew by 42% since 2010, which is three years after Amazon set up shop. By 2017, the median rent in Seattle was $2,203, up from $1,553 in 2010.”

Related stories:
Rent rates in Toronto shot up significantly last year
Toronto market poised for a robust 2018 – report

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