In recent years, the dream of homeownership in Canada has undergone a significant transformation. The traditional expectations of owning a suburban house, a rural cottage, or a downtown condo as you enter the prime of your career are being reevaluated as more Canadians find themselves with renting as their only affordable option. Rising interest rates, the lack of supply, and the stagnation of wages combined with the skyrocketing prices of homes combine to create this new reality.
Canada’s not alone in this trend. In countries like Germany, Austria, and Switzerland, renting is a common and accepted lifestyle, with over half the population living in rented accommodations. These nations, with their high population densities and centuries-old urban designs, provide a model that Canada is increasingly mirroring.
Currently, about one-third of Canadians are renters, and that figure is rising steadily each year. In major cities like Toronto, Victoria and Vancouver, nearly half of the residents rent. This new environment is not just the result of the economic climate, but also reflects demographic changes and preferences. Millennials tend to value flexibility and may generally be less decisive about where they want to put down roots, especially with so much volatility in the country, both economically and politically. Even with the means, it’s sometimes hard to justify locking yourself into a thirty-year mortgage in an environment when even predicting the next five years seems impossible.
Even the older generation, the new empty nesters, are starting to prefer renting, as it allows them to avoid the responsibilities of home maintenance and mortgages. Seniors living alone can find renting a more practical and manageable option.
But even if you resign yourself to a renting lifestyle, there is still a huge set of challenges. The ongoing nationwide housing shortage has pushed rents higher, affecting even areas with rent control measures. In cities like Toronto and Vancouver, rents have surged for decades now, but smaller markets are not immune to these pressures.
There is also the uncertainty of potential rent increases and loopholes in tenant protection laws. Practices like “renovictions,” where tenants are evicted under the pretext of renovations, can cause tremendous anxiety for those caught in its wake. There’s also the increasing popularity of short-term rentals on platforms like Airbnb that further reduce the availability of long-term rental units, as many owners see the potential for greater year-over-year profits through this practice.
With steady immigration contributing to increased demand for rental housing, the pressure on the rental stock is expected to intensify. According to RBC Economics, there is an urgent need to expand the rental housing supply to accommodate diverse needs and income levels. This includes developing family-friendly rental options in neighborhoods with access to schools and amenities.
As we continue to evolve with this new shift in lifestyle, the need for purpose-built rental housing and a more diverse rental housing market becomes increasingly apparent. It’s crucial that policymakers continue to address the challenges of affordability and supply head-on, ensuring that renting remains a viable and stable option for all Canadians.