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The view looking east from Strachan Ave. towards downtown Toronto and the condominiums that fill the skyline, is photographed on Jan, 26 2017.

Fred Lum/The Globe and Mail

I'm pretty firm on suggesting people rent if they can't properly afford the full cost of owning home, but the city of Toronto is pushing back. Rents there are soaring in a way that puts renters in the same position as owners in having to direct too much of their income to the cost of shelter.

A CBC reporter named Shannon Martin is living the nightmare. The rent on her 454-square-foot apartment rose to $2,600 from $1,650 – an increase of $950. She had to move out as a result, and now she's "couch-surfing." That means living with family and friends.

Vancouver was recently singled out as the most expensive city for renters, with Toronto second. Both cities top the list of most expensive housing markets, too. Unfortunately, renters in these cities must make the same compromises in search of affordability as buyers:

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  • Consider moving to a more affordable city.
  • Look further away from downtown and consider the suburbs.
  • Consider something smaller than you initially wanted – a bachelor instead of a one bedroom, in the case of an apartment.
  • Share a place with family or friends.

The rental market used to be a refuge for people priced out of the housing market, but now it's collateral damage.

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Only real estate agents are benefiting
An economist talks about winners and losers in Toronto's relentless housing market. He uses the term "trapped wealth" to describe what rising prices mean to owners. They can't move because the houses they want to buy have soared in price, too. Oh, wait, it's not just agents who are winners in today's housing market. The Ontario government is also benefiting from rising house prices.

Foreclosures can happen with reverse mortgages
The appeal of a reverse mortgage is that you can access some of the equity you have in your home and not repay what you owe until you sell. Still, there are cases where foreclosures can happen.

IKEA's greatest product
A longtime designer for the furniture giant says this is his favourite product because of its simplicity and capacity to be customized.

Top money blogs for 2017
A non-profit debt counselling agency's picks for top money management blogs. This newsletter is on the list.

How to interview a financial planner
Here are 10 questions to ask a planner you're considering. The list comes from the Financial Planning Standards Council, which runs the Certified Financial Planner (CFP) designation in Canada. Figure on interviewing at least a couple of planners or investment advisers before you hire one.

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Today's featured financial tool
The portfolio benchmark calculator on the GetSmarterAboutMoney.ca website can help you compare your own investments to a mix of stock and bond market indexes.

Ask Rob
The question:
"As a young professional who's moving out shortly, I need to a buy a whole host of things I've never had to look at before. Specifically, the biggest purchase seems to be getting a mattress. Do you have any advice for buying one?"

My reply: "A very practical question that deserves a good answer. That's why I posted it on my Facebook personal finance page on Feb. 21. Check out the answers here."

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length.

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If you're ready to put down housing roots and buy a home you can afford, owning has financially speaking worked out well for most Canadians. But despite what your parents may tell you, renting doesn't always mean you're just "throwing money away."

If you're disciplined with your finances, then renting can be a perfectly good lifestyle choice in the short term, without setting you back financially. For very financially disciplined individuals, renting can even make sense over the long term.

To start to understand when it can make sense, this Preet Banerjee video helps explain some of the variables that can impact your bottom line when it comes to owning, renting and investing.

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