Nearly two million Canadian families are overspending on housing

Relaxed credit requirements have made it far easier for Canadians to overspend over the last few years, with approximately 1.8 million households allocating more than 30% of their incomes on housing, according to a recent analysis by the BC Non-Profit Housing Association.

More crucially, as much as 800,000 households nationwide spend more than 50% of their incomes on rental fees.

“Paying too much for rent has become the new normal,” association CEO Jill Atkey told Global News. “That takes a real toll on health, on time and quality of life.”

A major driver of the trend is developers’ current focus on condo construction, with the industry veering away from purpose-built rentals roughly two decades ago.

Data from the Credit Counselling Society showed that this spending is fuelling anxiety, especially considering the pressures of inflation and rising costs of living.

During the second quarter of this year, Canada’s average household debt ratio shrunk to 177.1% of disposable income, slightly lower than the previous quarter’s reading of 177.6%. Canadians are also carrying a debt load of an average of $30,000 each – far above the $12,000 level just 20 years ago.

Additionally, 1 out of 3 Canadians indicated that their debt loads have increased since last year, and that they are spending more than their net income. As much as 43% are forced to live paycheque to paycheque, while fully 83% confessed anxiety over growing daily living costs.

“Canadians continue to rely on their credit cards or lines of credit to supplement costs of living,” CCS president Scott Hannah said. “If the economy continues to slow amidst trade tensions and other factors, Canadians need to prepare now for a potential recession in the future.”