Moving homes just got a lot more expensive
The average rent for tenants who have been living in their homes for less than a year is significantly higher than for long-term renters.
An analysis report recently published by Statistics Canada revealed that tenants who had moved into their current home within the past year faced “median” rental costs that were 21 per cent higher than tenants who had lived in their unit for longer than a year.
The report explains that while rent control policies protect current tenants, they impose no restrictions on the prices that landlords demand from new renters. For example, for a two-bedroom unit in Toronto, “recent renters” face a median monthly rent of C$2,180, while “existing renters” only face a median monthly rent of C$1,460.
The report explains that recent renters are significantly more likely to have living situations that are defined as “unaffordable” than existing renters. Statistics Canada defines housing as unaffordable if the tenant is forced to pay more than 30 per cent of their pre-tax income on rental costs.
In Canada, the likelihood that a recent renter was signed into an unaffordable lease was 13 per cent higher than existing renters—43.2 per cent vs. 30.5 per cent, respectively. The report explains that people between the ages of 25-29 are the most likely demographic to be living as recent renters, with people aged 18-24 and 30-34 coming in close second and third respectively. Between academic opportunities, new jobs, relationships, and just general spontaneity, many young adults are unlikely to be staying in one spot for too long.
But as housing affordability drives more people towards the rental market, prices will only increase for recent renteres. With every vacancy, there will come a higher price to pay. And while most graduates aspire to find a high-paying job in their field, this is unfortunately not a reality for most.
Rising rental costs are often due to an increase in demand. So why is the demand for housing in Canada’s cities growing so quickly? To start with, more people are opting to live in downtown areas due to better job and recreational opportunities. The report explains that the number of people who are buying homes is shrinking, so the number of people who are forced to rent is growing.
In the last decade, the proportion of homeownership in Canada has been steadily declining. In that same period, the increase in households that are currently renting is more than twice the increase in households that own their property.
The likelihood that a young millennial—someone between the age of 25 and 29—owns their home has fallen by almost 10 per cent in the last decade from 44.1% in 2011 to 36.5% 2021.
The report explained minority groups such as Latin American, Arab, and Black populations are more likely to be recent renters than any other ethnic demographic.
Additionally, 32.4 per cent of recent renters who live in subsidized housing still have financial situations that would define their rent as “unaffordable,” as compared to existing renters’ 19.7 per cent.
As the housing supply continues to lag behind the demand, rental prices will only increase. Anyone looking to enter the rental market, such as current students or recent graduates, will likely be forced to pay significantly more for a unit that has recently been vacated.
Copy Editor (Volume 49) | aidan@themedium.ca —Aidan is completing a major in Professional Writing and Communications at the University of Toronto Mississauga. He previously worked as the Associate Editor for the Arts and Entertainment section of The Medium, and currently works as the Copy Editor for The Medium. When he’s not catching up on course work or thumbing through style guides, Aidan spends his free time exercising (begrudgingly), singing (unmelodically), and trying (helplessly) to read David Foster Wallace’s Infinite Jest. The latter of which has taken 3 years to reach the 16th page. You can connect with Aidan at aidan@themedium.ca.