This week’s census data revealed Canadians’ changing living habits – and the trickle-down effect that’s affecting the rental market and its existing stock in Toronto.
Only 50.2% of Millenials own their own homes, compared with 56% of boomers who owned when they were that age, according to the Census. However, Phil Soper, president and CEO of Royal LePage referred CREW to a summer study the organization commissioned on peak Millenials (aged 25 to 30) that found 87% believed homeownership was a positive thing and intended to someday own a home, and in which 69% said they intended to buy a home within five years.
“If you compare that to Stats Can data, it shows people are leaving their parents’ homes later, staying in school later, and essentially growing up at a slower rate than their parents, which makes perfect sense,” said Soper. “With technology and increasing lifespans, the old standard of when we got married and left the house got stretched, so it makes perfect sense to me.”
Housing affordability has also contributed to more millennial-aged Torontonians renting than their parents did at their ages. The city is experiencing inventory shortages on the ownership and rental fronts, and Soper says condo rentals will likely comprise a large part of the incoming supply.
“I think one of the things we’re going to continue to see is the trend that’s been obvious to us for some time, and it’s that purpose-built rentals will not keep up with the demand for rental accommodation,” he said. “So we’re going to see more and more property that is developed for ownership, but that is owned with the intent of renting it.”
Soper added that the reintroduction of rent control in Ontario will dissuade developers from building purpose-built rental buildings, further constricting rental supply.
“Particularly in Ontario with the reintroduction of rent control, this will become the case,” he said. “Some of the big projects intended for the rental market will now move back to condominium-based ownership. It’s too bad, but it is what it is. The good news is that those who buy individual condo units for the rental market will fill in the gap.
“If you’re renting in contemporary Canada, you’re likely renting from an entrepreneur who has purchased a home, a condo.”
Of the 14.1 million households in the Census, 9.5 million owned their homes in 2016, for a rate of 67.8%, which is down 1.2% from the 2011 census.
The Census revealed the number of renters in the country rose commensurately with the cost of ownership, however, that is out of step with a decades-long trend of dwindling rental supply. Forty percent of renters spent more than 30% of their monthly income on house, which hasn’t changed since 2011.
