Many young Canadians likely to be forever renters
Young Canadians are being locked out of the housing market and forced into a cycle of permanent renting, with the average renter now 32 years old.
Young Canadians are being locked out of the housing market and forced into a cycle of permanent renting, with the average renter now 32 years old.
According to Statistics Canada, far more tenants are living in the same rental unit for five years or more than 30 years ago. Last month, the agency published a report which found that the number of renters who lived at a different address a year earlier dropped from 29.5 per cent in 1996 to 19.9 per cent in 2021.
Higher rental prices aren’t just pinching the pocketbooks of young Canadians; they are stifling their social mobility.
“In 1996, for example, renters with a tenancy of less than one year were paying monthly average shelter costs of $640, $40 more than those with tenure of five or more years ($600),” reads the report. “By 2021, this gap had widened to $380 per month; renters with tenure of less than one year were paying average shelter costs of $1,480 per month, compared with $1,100 per month for those with tenure of five or more years.”
Similarly, a report from rental risk intelligence platform SingleKey Inc. found that 11.7 per cent of renter households have children.
“You typically think that renters are in their 20s, people just getting started with life and early in their career,” Viler Lika, co-founder and chief executive officer of SingleKey told the Financial Post. “But that’s changing, especially in the cities where it costs them.”
The median age of renters increases to 34 years old in Canada’s more expensive cities, such as Toronto and Vancouver.
Deputy chief economist at Canada Mortgage and Housing Corporation, Aled ab Iorwerth, said that the concept of lifelong renting has already been well established in Montreal. However, it’s becoming a national trend.
“In Toronto and Vancouver, housing costs have gone so high that you either have to go a very long way (outside of the city) to get a home that’s affordable, or you rent,” said ab Iorwerth. “I think it’s very likely that there will be an increase in the proportion of lifelong renters,”
Average rent growth reached record-highs in 2023, rapidly outpacing wage growth.
CMHC reported that high demand and historically low vacancies led to the dramatic incline, which has since declined as a result of reduced immigration and weak labour markets.
“We haven’t seen much rent growth over the last couple of years because of this weakness in the overall economy,” said ab Iorwerth.
However, newly constructed rental buildings come with high monthly fees due to increased construction costs.
The average asking rent for all property types in Canada was $2,105 per month last month, just slightly lower than in October 2024, at $2,152 per month. Meanwhile, the average sat at $1,845 per month before the onset of the COVID-19 pandemic.
This has created a rental gap between new and established tenants, which is most apparent in cities such as Toronto and Ottawa.
“The monthly shelter cost gap between recent and established tenants was largest in Toronto (52 per cent) and Ottawa (39 per cent) in 2021, while it was in line with the national average in Vancouver (31 per cent). However, it was well below the national average in Montréal (10 per cent) and Calgary (10 per cent),” reports Statistics Canada.
“The continued fast-paced increase in rental costs seen since 2021 suggests that the shelter cost gap between recent and established tenants may have widened further in recent years. Since May 2021, many of the temporary provincial rent control policies and tenant protections enacted following the onset of the pandemic have come to an end.”
"forced into a cycle of permanent renting". All this says is the liberal/ndp.... plans are working well. What is likely to be seen in the future, a sharp increase in the age of renters, sharp increases in rent charged. Have also read that a smaller group of companies controls much larger shares of the rental market. Would not be surprised if the like of carnage carney have growing bank accounts directly or indirectly from this.
In the pre-Trudeau era you you could find a home in most of Canada’s cities at a reasoable price. Sure the larger centres were expensive but do-able. Post Trudeau with the flood gate immigration policies a single family home is simply out of reach if you do not already own one. The future is Formerly Great Britain and Australia. Australia is on track to be the tent city capital of the world. I wonder if decades of crazy woke governments and nutty immigration policies might have something to do with it?