Many Canadians are finding it harder to find affordable housing as rents rise across the country.
The rise in prices is driven in part by rising interest rates, which cool the home buying market and, in turn, put more pressure on rents.
Here are five charts that show some of the numbers behind the problem.
Rents are going up again
After pandemic-induced declines in 2020 and 2021, Canadian rental rates are on the rise again. The median rent for all property listings on Rentals.ca in the second quarter of 2022 was $1,750, up 7% from the same period last year.
Listings include single-family homes, townhouses, townhouses, condominium apartments, rental apartments and basement apartments.
The year-over-year increase in the second quarter of 2022 continues a trend. Average rents nationwide also rose year-over-year in the previous two quarters.
However, rental prices across Canada have yet to reach pre-pandemic levels, which saw the average rent reach $1,825 in the fourth quarter of 2019.
British Columbia has seen the highest year-over-year increase in average rent, nearly 25%. Meanwhile, Nova Scotia has seen double-digit increases throughout the pandemic. In 2021, the province’s business development agency launched a marketing campaign to attract remote workers. In 2022, the province introduced a new tax on non-resident property owners.
Income vs rent
The Canadian Mortgage and Housing Corporation defines “affordable” housing as housing costs that are less than 30 percent of a household’s pre-tax income. Taking rent and utilities into account, CBC News calculated how much a household must earn to keep the average cost of a two-bedroom apartment below that threshold.
In Vancouver, where the average monthly rent for a two-bedroom apartment has reached a staggering $3,597, a household would have to earn more than $150,000 in gross income for that rent to be considered affordable. In Toronto, a household must earn more than $135,000.
Housing costs versus everything else
Breaking down the Consumer Price Index (CPI) also gives a sense of how housing has affected Canadians’ wallets. The CPI measures changes over time in the prices of goods and services such as food, clothing, transportation, health care, recreation, and, of course, housing.
Although prices tend to rise over time in an economy, the cost of housing has risen at a faster rate than everything else we buy.
Between 2002 and most of 2004, the cost of “everything else” increased at a faster rate than housing.
But by the end of 2004, the rise in housing costs began to outpace the rise in the cost of everything else. Except for a period in August and September 2005, this trend has continued since then.
Roommate households are gaining popularity
Some people have resorted to living with a roommate or roommates to ease rental costs. Roommate households, which StatsCan defines as two or more people living together who are not part of a census household, are the fastest growing household type in Canada.
While still only a small portion of all Canadian households (four per cent), the 663,835 roommate households in 2021 represent a 54 per cent increase from 2001.