Inflation takes a backseat as Canadians worry more about rising housing costs
Housing affordability continues to be the most pressing issue for Canadians, a new survey has revealed.
Despite recent interest rate cuts by the Bank of Canada, the first in over four years, the public’s outlook on housing affordability has remained grim.
Leger, which polled 2,650 Canadians on their economic confidence and spending habits, found that housing concerns have overtaken inflation as the top worry since January 2024.
However, inflation still ranks high, having decreased in importance by only 8% since September 2023. Other significant issues include healthcare, climate change, immigration, homelessness, and taxes.
“Current and future economic confidence, both for the country and households, is largely stagnant this wave,” Leger wrote in the report. “While lower inflation and a recent interest rate cut mean concerns in these two areas have continued to abate, housing affordability remains a huge issue.”
Notably, 50% of Canadians paying mortgages or rent reported increased payments over the past couple of years.
“This rises to a phenomenal seven-in-10 among renters. “Increases are seen for all subgroups, but the lowest income earners are the ones who are being hurt the most,” the report read.
“Many Canadians are spending more on housing, which reduces their disposable income and is impacting their economic outlook.”
Read next: What’s next for Canada’s housing market after Bank of Canada cut?
To cope with higher housing expenses, many Canadians are cutting back on other spending. Grocery and household item expenses have seen the most significant reductions, particularly in Alberta and Quebec. In British Columbia, a large number of renters and homeowners are opting to dine out less and reduce their reliance on food delivery services.
The survey also noted a slight decrease in concerns about interest rates, dropping from 17% in January to 14% by mid-July. With another rate cut announced on July 24 and more expected, there’s optimism that this concern may continue to diminish.
While the housing situation remains challenging, a recent report by Point2Homes has identified several large Canadian cities that offer a “well-balanced rental experience,” potentially providing some relief for renters.
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