High mortgage rates and rapidly rising rents have the majority of Canadians worried about their ability to afford their monthly payments.
According to a new Leger survey, 55% of Canadians have worried about being able to pay their mortgage or their rent over the last two months. Of those with concerns, 16% said they "worried frequently."
Anxieties were heightened amongst younger Canadians — those between the ages of 18 and 34 (66%) — as well as residents of Alberta (67%) and British Columbia (68%).
The survey was conducted online between August 18 and 20, and included responses from 1,537 Canadians aged 18 years and older.
The Bank of Canada delivered back-to-back interest rate hikes this summer, bringing the policy rate to 5%. Six major banks subsequently raised their prime rate to 7.2%, the highest level since March 2021. Prior to the return of rate increases in June, roughly three quarters of variable-rate mortgage holders were already at their trigger rate.
The average rent in Canada hit a record-high in July of $2,078 per month, an 8.9% annual increase. Compared to July 2021, rents have risen 21%. Locally, a one-bedroom apartment in Toronto costs upwards of $2,500 per month; in Vancouver, it’s over $3,000.
The lack of affordable rental homes, and the ever-increasing cost of rent, was deemed a serious problem by 95% of respondents. However, 15% of homeowners have space they could be renting out but aren’t, and another 15% could turn part of their property into a rental but haven’t.
In order to restore affordability to the market, Canada needs to build two million purpose-built rentals between 2024 and 2030. The figure is courtesy of a report from the National Housing Accord, which details 10 recommendations the federal government can adopt in order to achieve the target.
The report stresses that in order for the "ambitious" goal to be met, the federal government must work with its provincial and municipal counterparts, as well as the private and non-profit sectors. builders, developers, the non-profit sector, and the higher education sector.
Forty percent of respondents to Leger’s survey blamed the federal government for the housing crisis, while 32% blamed their provincial government. Just 6% laid responsibility for the crisis on their municipal government. Homeowners were more likely to criticize the feds (43%), while renters believed their provincial leaders were culpable (37%).
Rather than just point fingers, though, respondents signalled their approval on a number of suggested actions governments could take to ease the strain on the rental market.
Government-supplied affordable housing, providing incentives for developers, and tighter rent control were supported by over 75% of respondents, while more than 55% were in favour of disincentives for short-term rentals.