Photo: James Bombales
The common wisdom is that households should only spend 30 per cent of their income on rent in order to stay financially stable, but that’s becoming less and less possible for many Canadians.
In fact, according to the 2018 Canadian Rental Housing Index, nearly half of Canadian renters are spending more than that recommended 30 per cent — and one in five report spending more than 50.
“The data shows that spending more than 30 per cent of income on housing has become the new normal for individuals and families in almost all areas of Canada,” writes Acting CEO of the BC Non-Profit Housing Association Jill Atkey, in a statement.
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The index also found that average rental costs are outpacing increases to household incomes. In Ontario, average rent costs increased by 20 per cent from 2011 to 2016, while average income increased by only 12 per cent.
As affordability issues increase, living conditions worsen. According to the index, more than 417,000 Canadian renters lived in homes considered overcrowded.
These challenges come as more and more Canadians are opting to rent. Between 2011 and 2016 there were 400,000 new rental households added for a total of 4.4 million rental households nationwide — or 32 per cent of Canadians.
“With escalating prices keeping many Canadians from affording home ownership, as well as lack of affordable rental housing supply, more people are entering the rental market or staying in the rental market longer,” writes executive director of the Canadian Housing and Renewal Association Jeff Morrison, in a statement. “This marks the first time in a generation that the rate of Canadian renters has outpaced the number of Canadians buying a home.”
This sentiment was echoed in a recent report from the Ontario Real Estate Association, which found that over half of Millennials surveyed indicated that homeownership is unaffordable in their neighbourhood, while 58.7 per cent on non-Millennials said the same.