Canadian renters signing new leases have paid an average of $1,360 over the past two years, according to a recent report by Statistics Canada. The report also reveals that one-third of Canadians are renters. It emphasizes that rental costs are negatively correlated with the duration of residence, with average costs higher for dwellings rented within the last two years compared to those with the same tenants for 10 or more years.
The report titled “What’s included in Canadians’ rent?” highlights the need for further attention on rental cost data. It notes that renters generally experience less favorable socioeconomic outcomes, weaker community belonging, and poorer health compared to homeowners. Additionally, there is a lack of affordable housing for lower-income earners in Canada.
A separate report by Rentals.ca and Urbanation shows that the average asking price for a rental unit in Canada reached a record $2,042 in June. Over the past two years, average asking rents have increased by 20 percent. This increase is attributed to rising interest rate hikes and population expansion.
The Statistics Canada report draws on a survey of tenants in Canada, but does not include landlords’ profit margins. The Canadian Federation of Apartment Associations estimates the average profit margin to be about 8 percent. It emphasizes that a significant portion of rental revenue goes towards covering operating costs, property taxes, utilities, mortgage payments, and major repairs.
The House of Commons Human Resources Committee is studying the “financialization of housing,” with experts testifying on the affordability of rental units. Finding affordable apartments in urban centers is challenging, and the minimum level of affordability for median income earners is $1,700 per month. It is stressed that a balanced approach is needed, with the involvement of the private sector and a substantial allocation of housing supply towards non-market and community housing.
The report also examines the impact of non-financial inclusions in rental costs, such as utilities, parking, appliances, and air conditioning. It highlights the importance of considering these factors when comparing rental costs, as they vary across regions. For example, air conditioning is typically included in rents in Ontario and Quebec, while electricity charges are often covered in Manitoba. The inclusion of parking and fuel-based utilities also differs across provinces.