Nearly half of Canadian renters will continue to rent: Poll

Canadian Press

Published Thursday, June 23, 2022 5:35AM EST

Last update Thursday, June 23, 2022 5:35AM EST

Nearly half of Canadian renters say they will continue to do so indefinitely and aren’t sure when they will be able to enter the housing market, according to a new survey.

Tenants surveyed by insurer Canada Life cited a lack of liquidity, fear and uncertainty as reasons for staying on the sidelines, with 73 percent saying it was a bad time to buy a home and 17 percent saying they would never buy a home.

91 percent of renters surveyed believe that buying a home is getting more difficult each year, and 89 percent expect that the next generation will have more difficulty entering the housing market.

While 79 percent of respondents think home ownership is a good investment, 64 percent don’t think they will be able to purchase a home unless they have financial support from others such as family members.

The survey, which was conducted between May 5 and May 11, also found that Canadians aged 25-29 are twice as likely to keep renting indefinitely than those aged 30-49.

The housing market is showing signs of cooling, however, with home sales down nearly 22 percent in May from a year ago, and nearly nine percent between April and May, according to recent data from the Canadian Real Estate Association (CREA). The nationwide non-seasonally adjusted median home price was $711,000 in May, down nearly five percent from April.

But that doesn’t mean renters feel more confident in their ability to buy a home, as out-of-control inflation and rising interest rates affect money availability, said Paul Orlander, executive vice president of individual customers at Canada Life.

“These factors are likely to cause Canadians to continue to see home ownership as increasingly difficult,” he said in an interview.

Existing homeowners are also feeling the pressure, with 24 percent of those surveyed saying they feel bad at home.

With the Bank of Canada continuing to raise interest rates, homeowners may face more pain as mortgage payments rise.

The central bank, which is due to make its next interest rate decision on July 13, has indicated that it is open to bigger hikes if needed. Meanwhile, Canada’s inflation rate rose to 7.7 percent in May, according to Statistics Canada.

No matter what decision Canadians make about home ownership, wealth building and retirement plans will be affected.

While the purchase builds stocks that can be of long-term value, home ownership and the cost of maintaining a home can actually replace Canadians’ ability to save for retirement, Orlander said.

He added that rent on the other hand could provide more flexibility and could maintain a free cash flow of savings and investments each month that could head towards retirement.

This report was first published by The Canadian Press on June 23, 2022.

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