Concerns Rise as High Mortgage Rates and Rent Soar Across Canada

Concerns Rise as High Mortgage Rates and Rent Soar Across Canada

The financial strain of high mortgage rates and rapidly increasing rents has left a majority of Canadians anxious about their ability to meet their monthly housing payments.

 In a recent Leger survey, it was found that 55% of Canadians have experienced worries about paying their rent or mortgage over the past two months, with 16% expressing frequent concern. Notably, younger individuals aged 18 to 34 (66%) and residents of Alberta (67%) and British Columbia (68%) reported heightened anxieties.

 The survey, conducted from August 18 to 20, gathered responses from 1,537 Canadians aged 18 and above.

 The Bank of Canada's consecutive interest rate hikes this summer, culminating in a policy rate of 5%, contributed to increased concerns. Major banks followed suit by raising their prime rate to 7.2%, the highest level since March 2021. Even before the recent rate hikes, about three-quarters of variable-rate mortgage holders had reached their trigger rate.

 The escalating rental landscape is also a significant factor. The average rent in Canada reached a record high of $2,078 per month in July, reflecting an annual increase of 8.9%. Year-over-year, rents have surged by 21%. In cities like Toronto and Vancouver, the cost of a one-bedroom apartment exceeds $2,500 and $3,000, respectively.

 The shortage of affordable rental properties and rising rent costs were regarded as severe issues by 95% of respondents. Interestingly, 15% of homeowners have untapped rental space, and a similar percentage could convert part of their property into rentals but haven't done so.

 To address affordability concerns, Canada needs to construct two million purpose-built rental units between 2024 and 2030, as outlined by a report from the National Housing Accord. This ambitious target necessitates collaboration among federal, provincial, and municipal governments, as well as private and non-profit sectors.

 The survey indicated that 40% of respondents hold the federal government responsible for the housing crisis, while 32% blame their provincial government. Only 6% attributed the crisis to their municipal government. Homeowners were more inclined to criticize federal efforts (43%), while renters leaned toward holding their provincial leaders accountable (37%).

 The respondents supported several potential government actions to alleviate the rental market strain, including government-provided affordable housing, developer incentives, stricter rent controls, and disincentives for short-term rentals.

Harman Shahi

Harman Shahi

Hey there! 🌟 I'm a tech enthusiast who loves solving tricky business puzzles with innovation and digital know-how. Founder of Listo, where we're all about turning ideas into action! 🚀🔥
Toronto, Canada