Renters in Canada's priciest cities face 13-year wait to save for a home
Renting in Canada’s biggest cities is becoming an uphill battle, with new data showing that Toronto and Vancouver are the worst places for renters trying to balance high housing costs and the goal of saving for homeownership.
The average renter in these cities spends almost half of their income on rent, leaving little room for saving toward a home deposit, according to an analysis by Money.ca.
In Toronto, the average cost of renting a one-bedroom unit is $1,691 per month, while the average annual income sits at $41,800. This means that renters are spending 48.55% of their income just on rent. Vancouver is not far behind, with renters paying $1,697 monthly, or 46.07% of their $44,200 annual income, on a one-bedroom apartment.
But it’s not just the high rent prices making life difficult for renters in these cities. The time it takes to save for a home deposit is another major hurdle.
In Vancouver, it would take the average renter more than 13 years to save up for a 10% down payment on a home priced at $1.19 million. Similarly, in Toronto, it would take over 13 years to save for a down payment on a home with an average price of $1.1 million.
Money.ca’s analysis also showed Halifax as another city where rent affordability is a growing concern. With an average rent of $1,322 per month and an annual income of $38,700, Halifax renters are spending 40.99% of their income on rent, making it the third least affordable city for renters.
On the other hand, Quebec City stood out as a rare bright spot for renters. With an average rent of just $911 per month and an average income of $50,500, renters in Quebec City spend only 21.65% of their income on housing – far below the national average of 34.5%. This affordability also makes Quebec City one of the best places to save for a home, with renters able to save for a 10% down payment in just three and a half years on a home priced at $343,200.
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Other cities with better prospects for homebuyers include Regina and Winnipeg, where saving for a down payment takes around three to four years.
In Regina, with an average income of $43,900 and home prices averaging $310,223, it would take about three and a half years to save for a deposit. In Winnipeg, the timeline extends slightly to just over four years, with an average income of $42,300 and home prices averaging $346,654.
“Deciding where to rent while saving for a home can be very challenging with rising rental prices,” Kris Bruynson, VP of marketing and product at Money.ca, said in the report. “Although Vancouver and Toronto are appealing, each home buyer must weigh the cost versus savings when buying in these expensive cities. Is it worth spending 13 years saving up a down payment just to get on the property ladder in an expensive city?”
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