Diminishing house affordability across key markets is expected to limit the growth of home buying demand and lead to a greater share of renter households. Policies designed to encourage home ownership have been replaced with stricter mortgage insurance qualification criteria in recent years which have made it more difficult for first-time buyers to enter the market, compounded by quickly rising down payment requirements. According to Statistics Canada, household debt to disposable income in Canada is at record levels as of the end of 2017. Given record-high current home prices, tighter mortgage policies, and an increasing interest rate environment, in 2016, for the first time since 1986, home ownership has started to decline and expects it to continue to do so into the future.

With home prices at historic highs, incomes and average rents remain largely in lock-step. There is a widening cost gap between renting and owning, driving rental demand. From 2001 until 2016, Canadian house prices increased by a compounded annual rate of 6.8% and posted positive gains in all years with the exception of the great recession in 2008 (Source: CMHC / Teranet) compared to average Canadian two-bedroom rent CAGR of 2.4% over the same time period.

The continued growth of house prices has further widened the affordability gap between renting and home ownership, nationally as well as in Toronto and Ottawa. Toronto in particular has witnessed drastic increases in housing prices over the past decade (Source: CMHC / Teranet, Conference Board of Canada). Average two bedroom monthly rents and household income per capita have risen at similar rates since 2001, while home prices have more than doubled over the same time period, further widening the affordability gap.

Multi-Residential Rental Market Overview >>

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  Increasing Rental Demand >>
Overall demand for residential rental accommodation has historically been stable and is expected to increase in the future. Strong population growth... More >>

  Favourable Population Growth Outlook >>
According to Statistics Canada, the Canadian population is forecast to increase by 9% from 2016 to 2022, while Ottawa's population is forecast to grow by 7%... More >>

  Demographics and Propensity to Rent >>
Due to the importance of age on housing decisions, demographic shifts can have a profound impact on demand for different types of housing... More >>

  Home Ownership Rates and Declining Affordability >>
Diminishing house affordability across key markets is expected to limit the growth of home buying demand and lead to a greater share of renter households... More >>

  Limited Rental Supply Growth and Declining Vacancy >>
The replacement cost of multi-residential rental buildings is substantially higher than the value for which they can be purchased in the market... More >>

  Strong Average Rental Rate Growth >>
Rental affordability, measured as a percentage of personal income, in each of Toronto, Ottawa, Calgary and Edmonton has broadly remained in line... More >>

  Economic Data and Trends by Region >>
Canadian economic growth has been consistently strong over the past decade, with Canada leading all G7 nations in total GDP growth from 2007 - 2016... More >>

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