The ranks of Canadian renters is growing fast and though two-thirds of Canadian households owned their home in 2021, renters have increased at three times the rate of homeowners in the past decade, says a new report by RBC Economics.
The report found:
- The shift to renting has been widespread across age groups and areas, though younger Canadians and urbanites still make up the largest group;
- Growth in rentership is now strongest among baby boomers and in smaller cities;
- The affordability pressures, demographic forces, and behavioural preferences currently driving this change will continue to fuel it in the years ahead.
“The rapid growth in renters isn’t about to slow down. Concerted efforts among policymakers, developers and builders are required to ensure, expand and diversify Canada’s stock of suitable, affordable, and stable rental housing,” said the report.
“There have never been so many renters in Canada. According to the 2021 Census, almost 5 million households rented the home they lived in last year—up from 4.1 million a decade earlier. And while owner households still dominate the Canadian landscape by a ratio of two-to-one, renters accounted for most of the growth over the past 10 years. Rentership increased by 876,000 households (or 22%) compared to a rise of 770,000 (8%) in owner households.”
The report said millennials’ ownership rates are lagging those of previous generations at the same age. And millennials are lingering in rentership three to five years longer than their baby boomer counterparts.
Also, between 2011 and 2021, baby boomers (born 1946 to 1964, and the largest generation of Canadians) surpassed millennials (born 1981 to 1996) as the fastest growing group of renters (+4%).
And rising immigration and an aging population are also supporting rental demand. Given most newcomers typically rent for the first five to ten years of living in Canada, rapidly growing immigration targets (rising from 250,000 in 2011 to more than 401,000 in 2021) have significantly boosted demand for rental housing. Of the one million recent immigrants (a landed immigrant or permanent resident for five years or less) living in private dwellings, 56% (640,700) were living in rented accommodation in 2018. That’s nearly two-times the national average, leaving immigrants to represent a disproportionately high share of rental households in Canada, said RBC.
Canada’s aging population has also bolstered demand. Of the 5 million tenant-occupied dwellings recorded in 2021, nearly a quarter (22%) were occupied by seniors aged 65+. That’s a 3 percentage-point increase from the 19% share reported in 2011, it added.
“Burgeoning rentership will put tremendous pressure on our rental stock—already stretched and inadequate in many parts of the country. We’ll need to build more rental units. A lot more. And they’ll have to be the right kinds of units to meet the population’s increasingly diverse needs and income levels. This includes rental options suitable for families—that is, in neighborhoods close to schools and other amenities. The sharp rise in renter households living in single and semi-detached homes (+33%) over the last 10 years also speaks to a growing need for rental housing in lower density areas,” said RBC.
“We believe addressing the so-called “missing middle” in some of Canada’s largest cities would go a long way toward broadening rental options. And as the federal and some provincial (e.g. Ontario) governments aim to double housing construction over the next decade, there’s a golden opportunity to do just that through the right mix of policies, regulatory changes and incentives.”
(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)
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