New data shows that over a quarter of tenants in Vancouver spend more than half their income on monthly rent.
Royal LePage’s 2024 Canadian Renters Report shows that 27 per cent of Vancouver's renters spend over half of their income on rent, well above the national average of 16 per cent.
A third of Canadians live in rental accommodations but that figure has been gradually rising in recent years.
A recent survey by the real estate company, conducted by Hill & Knowlton, shows over a quarter of Canadian renters plan to purchase a property in the next two years; that figure jumps to 40 per cent for those aged 18 to 34.
Sixty-nine per cent of renters say they don't plan to buy a home soon. Over half of these respondents (54 per cent) say they don't feel their income will be sufficient to afford a property where they want to live. This figure increases to 61 per cent for renters aged 18 to 34.
Half of renters who plan to buy a home within the next two years say they will have a down payment of under 20 per cent. Twenty-six per cent say they will put 20 per cent down, while 15 per cent say they will have a down payment of more than 20 per cent.
Royal LePage notes that "mortgage insurance is required for homes purchased with less than 20 per cent down" in Canada.
Forty-four per cent of renters planning to purchase in the next two years believe they will be able to afford a home in their current city of residence, while 37 per cent do not. Around 40 per cent of renters who don't feel they can afford to buy in the area they rent say they will have to travel over 50 km to "buy within their budget."
Twenty-one per cent of tenants feel they can search for a home within 31-50 km of where they rent and 18 per cent said they will need to look within 16 to 30 km.
"Only 9 per cent of respondents are confident they could buy within 15 kilometres of their current location," according to Royal LePage.
Vancouver's rental costs and prospective home ownership in B.C.
Vancouver renters spend 27 per cent of income on rental costs compared to 19 per cent in Toronto and 10 per cent in Montreal.
In B.C., over a quarter (27 per cent) of renters plan to purchase a home in the next two years, while 52 per cent do not.
Over a quarter of renters in the province considered buying a home before signing or renewing their current lease.
“With a boost in rental supply in Vancouver, competition in this segment is improving, although affordability remains a challenge for tenants facing some of the highest rental prices in the country. Still, demand to live in one of Canada’s most popular cities remains consistent,” said Nina Knudsen, property manager at Royal LePage Sussex in North Vancouver.
“Empty-nesters and working professionals make up a significant portion of our renter demographic, as do tenants who are landlords themselves. It is not uncommon for renters to buy an investment property in a less expensive market and lease it out while they continue to save towards the purchase of a primary residence."
Some prospective landlords have also stepped out of the market due to tighter provincial legislation on rentals, "a potential challenge for the creation of rental supply," Knudsen added.
According to the latest Rental Market Report by the Canadian Mortgage and Housing Corporation (CMHC), the average rent in Vancouver for a two-bedroom unit in October 2023 was 8.6 per cent higher than a year prior. Vacancy rates sat at 0.9 per cent for both purpose-built rental buildings and condominium apartments.
B.C. renters spent an average of 23 per cent to 30 percent of their income on monthly rent, while 42 per cent spent between 31 and 50 per cent.
Twenty-five per cent of B.C. tenants spent more than 50 per cent of their income on rent.
