You think temporary accommodation costs are expensive in Toronto? Just wait – things are going to get worse!

After last summer you might think that temporary accommodation costs have gotten out of control in Toronto.  But, just wait. Higher pricing is coming your way quickly.

Everyone knows that Toronto rental pricing had seen serious increases with the general cost of housing increasing rapidly up until last April and with a vacancy rate less than 1%.  This was directly related to what seemed to be a significant climb in temporary accommodation rates. In fact, by the middle of the summer it was not uncommon to find basic temporary accommodation cost $3,700 per 30 day term. This is when only two years ago, it would be common to find temporary accommodation at $3,000 per 30 day term.

So, why are prices going up?

As many will know, home prices are off their high of April 2017, so why would prices still be going up?

One can look no further than the Ontario Government’s hike of the minimum wage from $11.40 to $14.00 just recently.  Housekeeping staff are typically paid minimum wage and make up an important expense to temporary accommodation companies.  All Points was told by one company that they estimate the annual cost to their company will increase by $270,000.  You can expect to see at least a $2/night increase in the cost of temporary accommodation across Ontario, resulting in a $60 increase per 30 day period.

However, in the same time period, the Bank of Canada has raised its key interest rate.  This could also result in an increased cost of financing for these temporary accommodation companies.

In short, corporations that require temporary accommodations for their relocating employees should expect higher costs again this summer.

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