Affordability challenges plague renters despite falling prices: report

A woman enters a building next to a sign advertising an apartment for rent on moving day in Montreal, Monday, July 1, 2024. THE CANADIAN PRESS/Graham Hughes

TORONTO — A new report suggests Canadian renters continue to face affordability challenges even as asking rent prices have fallen this year, while those considering the leap to home ownership are taking a wait-and-see approach.

Royal LePage’s 2025 Canadian renters report, which includes results from a survey conducted by Burson, found 37 per cent of renters in Canada spend between 31 and 50 per cent of their net income on monthly rent costs.

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The survey of more than 1,800 renters in early June indicated that 15 per cent of respondents were spending more than half of their income on rent, while 37 per cent were spending 30 per cent or less.

Rents have eased for eight consecutive months, but remain well above historical norms, according to the report.

It said rents are 5.7 per cent higher nationally than they were two years ago and 12.6 per cent higher than three years ago. Over the past half decade, average asking rents in Canada have risen by an average of 4.1 per cent annually, outpacing wage growth.

Due to those affordability challenges, four-in-10 respondents said they have reduced spending on groceries and food, while three-in-10 have reduced contributions to savings or retirement.

“Rental markets tend to respond more slowly than resale housing to changes in the economy. Home prices have softened in many regions through the first half of the year, and we’re now seeing that relief begin to flow through to the rental sector,” said Royal LePage president and CEO Phil Soper in a press release.

“Yet, for those aspiring to own, this may be the moment to take a harder look at what’s possible. With prices down in many markets, rates easing, and wages growing faster than the cost of housing, the path to ownership — long a distant beacon for many — may now be coming into clearer focus."

The report said more than half of all renters surveyed indicate they plan to buy a property in the future, but just 16 per cent said they plan to do so within the next two years.

Twenty-eight per cent of renters said they considered purchasing a property before signing or renewing their current rental agreement while 40 per cent are waiting for home prices to decline and 29 per cent are holding out for further interest rate cuts.

Soper said the data shows many tenants “are motivated to get a foot on the property ladder.” But he warned that waiting for the perfect window of opportunity could be a mistake.

“In Canada’s least affordable cities, entry-level opportunities have improved significantly, with home prices off last year’s peaks, incomes up and borrowing costs trending lower,” he said.

“Still, many renters ... are choosing to wait. History suggests they may be disappointed. Over the past 75 years, Canadian home values have risen approximately five per cent annually, running consistently ahead of inflation.”

Not all renters are waiting on the sidelines to buy, however. Nearly one-third of renters said they do not plan to purchase a home at all, according to the report.

Of those respondents, 53 per cent said they don’t believe their income will allow them to buy a property in the neighbourhood they want to live in and 40 per cent said that renting remains more affordable.

Another 40 per cent said they don’t want to take on the responsibilities of maintaining a property.

This report by The Canadian Press was first published June 19, 2025.

Sammy Hudes, The Canadian Press