More than a quarter of renters in Canada plan to purchase a home within the next two years

CNW Group
22 min read

In This Article:

Among those who expect to continue renting, insufficient income noted as greatest hurdle to home ownership amid tight competition in supply-strapped market 

Highlights:

  • 27% of renters plan to buy a property in the next two years; 40% among renters aged 18-34

  • Of those who do not plan to buy a home in the next two years, 54% say they do not feel their income will be sufficient to afford a property they desire; 61% among those aged 18-34

  • 29% of Canadian renters say they considered buying a property before signing or renewing their lease; 41% of them lacked a sufficient down payment

  • In British Columbia, 25% of renters spend more than half of their net income on monthly rental costs, well above the national average of 16%

TORONTO, June 20, 2024 /CNW/ - One third of Canadians live in rental accommodations, and that figure has been gradually increasing in recent years, as affordability challenges in the resale market persist. According to a recent Royal LePage survey, conducted by Hill & Knowlton,1 27 per cent of Canadians who currently rent their home say they plan to purchase a property in the next two years. Among those aged 18 to 34, that figure jumps to 40 per cent. Meanwhile, 69 per cent of renters say they do not plan to buy a home in the near future. Among them, more than half (54%) do not feel their income will be sufficient to afford a property in the area where they wish to live (61% among respondents aged 18 to 34).

"The rental sector is not immune to the significant affordability challenges stemming from Canada's acute housing shortage. High mortgage rates have made it difficult for many to purchase a home, forcing some to move into, or remain longer than planned, in the rental market," said Phil Soper, president and chief executive officer, Royal LePage. "Despite a short-lived decline in prices and demand for rental units during the height of the COVID-19 pandemic, the available supply of rental properties in most major markets remains ultra low."

Of renters who say they plan to buy within the next two years, half (50%) say they will have a down payment of less than 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. In Canada, mortgage insurance is required for homes purchased with less than 20 per cent down.

When asked how they will come up with their down payment, 53 per cent of respondents said they will use savings accumulated over the years, while 46 per cent said they will take advantage of the First Home Savings Account (FHSA), and 29 said they will draw on their RRSPs using the Home Buyer's Plan (HBP). Twenty-five per cent said they will use a financial gift from family or an inheritance. Respondents were able to select more than one answer.

Recommended Stories