33% of Canadians Renting No Longer Want to Buy A Home
Inflationary pressures and rising mortgage costs are beating down Canadians’ confidence (or interest) in investing in real estate.
A new study found that the portion of Canadian non-homeowners who don’t plan to buy a primary residence has jumped to 33% in the second half of 2022 from 25% in the first half of the year and 18% at the end of 2021.
Mortgage Professionals Canada’s 2022 Year-End Consumer Survey and Outlook found that the rapid decline in affordability due to high home prices and soaring interest rates has played a central role in how Canadians view homebuying.
But a majority of Canadians — in total 68% — still want to own a home someday, just not as soon as they would’ve wanted before. The smallest percentage of non-owners see themselves buying a home in the next year, while 23% are planning for it five years down the line.
The study reflects recent findings that rentership is growing among all age groups, but particularly more for younger Canadians. A report from RBC economists Robert Hogue and Rachel Battaglia found that millennials are taking longer to transition from renting to owning a home, renting anywhere between three to five times longer than the baby boomer generation.
MPC’s report also found that people are growing more and more anxious about the future of their finances. The number went up to 60% at the end of 2022 from 40% just six months before.
Those no longer considering buying a home will be free from mortgage anxiety but not from inflationary pressures. Rental costs continue to be on the rise as vacancy rates remain low.
Rental rates in big cities like Vancouver and Toronto, where vacancy rates are 0.9% and 1.7% respectively, are driving out renters with fixed or low income, particularly those who are most vulnerable like seniors, students, new immigrants, single parents, and persons with disabilities.
Information for this briefing was found via MPC, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
