Canada Housing Market

Toronto’s housing market crisis is not limited to soaring home values that price residents out of ownership; renting is also becoming increasingly unaffordable. A recent report by Royal LePage reveals that nearly one in five Toronto renters now spend more than half of their monthly income on rent, highlighting the severity of the city’s affordability crisis.

Key Findings from the 2024 Canadian Renters Report

The data shows that a staggering 19% of Toronto renters are dedicating more than 50% of their monthly income to rent. This leaves little room for essential expenses such as groceries and other living costs, exacerbating financial strain. Toronto’s figure is notably higher than the national average, where 16% of renters are similarly burdened.

Provincial Perspective

Zooming out to a broader provincial view, 18% of Ontario renters also spend more than half of their income on rent. The report further reveals that 35% of Ontario renters allocate up to 30% of their net income to rent, while 36% spend between 31% and 50% of their income on housing. Generally, spending no more than 30% of income on housing is considered the standard for comfortable living in Canada.

Home Buying Plans on Hold

The affordability crisis extends beyond rent. Nearly half (49%) of Ontarians surveyed have no plans to purchase a home in the next two years, with 61% of this group citing insufficient income as the primary reason.

Lack of Adequate Rental Inventory

Gillian Ritchie, a broker at Royal LePage Real Estate Services Ltd. in Toronto, points out the shortage of suitable rental units. “The city currently lacks an adequate inventory of decent larger units or freehold rental accommodations,” says Ritchie. This scarcity makes it challenging for families to find appropriate housing, whether they are waiting to buy a home or need temporary accommodation during relocations or renovations.

Impact of Investor Activity

Ritchie also notes that many investors purchased rental properties during the pandemic when interest rates were at record lows. However, with mortgage carrying costs significantly increasing over the past two years, some investors are now offloading their units, potentially reducing the available rental stock and worsening the rental housing shortage.

Conclusion

The new data from Royal LePage’s 2024 Canadian Renters Report paints a troubling picture of the rental market in Toronto. With nearly 20% of renters spending more than half their income on rent, the city is facing a severe affordability crisis that demands urgent attention and solutions.

Source: Royal LePage 2024 Canadian Renters Report (rlpnetwork.com)