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Canada renters hit record heights

Montreal leads the way with 63% of households renting

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Renters in Canada have increased to 33 per cent of households (the highest percentage ever) as their numbers rise due to the high cost of homeownership and an aging demographic.

Depending on the city you live in, the percentage could be even higher.

Twenty-eight of Canada’s top 50 cities have a proportion of renters above the national average, according to real estate site Point2’s study based on the latest census data. Montreal leads the way with 63 per cent of households renting.

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The share of renters in this country has grown steadily over the past decade, increasing at twice the rate of homeowners between 2016 and 2021. More than 40 percent of homes built during that time are rented, the highest renter rate high in decades.

Young people still make up the majority of renters, but baby boomers, the largest demographic group in the population until 2023, are not far behind.

“Renting has become widespread across all age groups,” says Alexander Ciunti, author of the Point2 study.

“With renters increasing at twice the rate of homeowners over this five-year period, it begs the question: is renting becoming the preferred housing option for Canadians?”

Several forces are at work here. Canada’s aging population means an increasing number of baby boomers are selling the family home and moving into rental housing.

At the same time, Canada’s housing affordability crisis has excluded many millennials and Gen Zers from the housing ladder.

“In a country where 18 of the top 50 cities have benchmark home prices above $1 million, an increase in rent is likely,” Ciunti said.

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In fact, it’s never been harder to afford a home in Canada, as higher mortgage rates outpace falling home prices, according to the Royal Bank of Canada’s latest housing affordability report.

At the end of 2023, a household needed to spend a “staggering” 63.5 percent of median income to cover the cost of owning a home at the median market price, up from 61.8 percent in the third quarter, Robert Hogue , RBC assistant. chief economist, said in the April report.

The high number of new immigrants, who tend to rent when they first arrive in the country, has also contributed to the “tenant revolution.”

The pressure this has put on the country’s property market is well known and rental prices have soared in recent years.

The average asking rent for a home in Canada hit a record $2,202 in May, up almost 10 per cent from a year ago, according to the latest report from Urbanation and

All provinces reported year-over-year increases in rent for purpose-built apartments and condominiums, but the Prairie provinces were hardest hit by rent inflation.

Rents in Saskatchewan increased by 21 per cent and 17.5 per cent in Alberta.

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You might think that expensive Vancouver or Toronto would have the highest proportion of renters, but in Canada, as mentioned above, that distinction belongs to Montreal.

This Quebec hub also boasts some of the lowest average rental prices among major cities. Rents in the city center cost around $3,000, significantly lower than in downtown Toronto or Vancouver, Point2 said.

More than half of the homes in Sherbrooke, Que. rent, probably for the same reason. Along with Trois Rivieres and Saguenay, rents in this city cost less than $1,500, even in the city center.

It’s no mystery why 54 per cent of Vancouver households rent. The composite benchmark home price here in May was $1,212,000.

Toronto, where the price tag is $1,117,400, has the highest number of rental homes in the country due to its larger population, but its 48 per cent share ranks only fifth in Canada.

Only one city among the 50 studied actually showed a decline in renters in recent years. In Richmond Hill, north of Toronto, the proportion of renters fell from nearly 26 per cent to about 22 per cent, even though houses here cost $1.5 million.

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Near Toronto, Richmond Hill is known for its safe streets, good schools, and high incomes. Seventy-eight percent of households here own their own home.

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real-estate market

A look at today’s chart suggests that buyers are gaining ground in many Canadian real estate markets. As aspiring homeowners wait for the Bank of Canada to exit, sellers have returned, causing inventories to rise, especially in Toronto and Vancouver, RBC’s Hogue said.

Active listings in Toronto increased 83 per cent year-over-year in May to reach a decade-high of 21,800 units, led by condo listings which increased 95 per cent.

“Increasing supply and weakening demand are giving buyers more bargaining power,” Hogue said. “And last month they leveraged that power to get some price concessions from sellers.”

The Toronto MLS home price index fell 0.4 per cent, the first monthly decline since January.

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Capital losses can only be applied to offset capital gains and not ordinary income, except in the year of death, but certified financial planner Andrew Dobson says there are several things to consider when deciding whether to sell or hold today, including inclusion of rising capital gains. rate at two thirds. Know more

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Wondering how to make ends meet? Write to us with your contact information and the essence of your problem and we’ll try to find some experts to help you, while we write a Family Finance story about it (we’ll keep your name out of this, of course). . If you have a simpler question, the expert team at FP Answers, led by Julie Cazzin, can try to solve it.

McLister on mortgages

Do you want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help you navigate the complex industry, from the latest trends to financing opportunities you won’t want to miss. Also, check out their mortgage rates page for Canada’s lowest national mortgage rates, updated daily.

Today’s Posthaste was written by Pamela Heaven, with additional reporting by staff at the Financial Post, The Canadian Press and Bloomberg.

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