How will Canadians afford a home?

Exactly half of those who plan to buy a home within the next two years say they will have a down payment of less than 20%. Just over a quarter (26%) say they will put 20% down, while 15% say their down payment will be more. In Canada, mortgage insurance is required for homes purchased with less than 20% down.

When asked how they will be able to make this purchase, 53% said that they will use savings accumulated over the years, while 46% will take advantage of the First Home Savings Account (FHSA. 29% admitted that they will draw on their RRSPs using the Home Buyer's Plan (HBP) and an additional 25% said they will use a financial gift from their family or an inheritance. Respondents were able to select more than one answer.

Where will they choose to live?

Of the aforementioned group of Canadians who plan to make a purchase in the next two years, 44% believe they will be able to afford a home in their current city of residence, compared to 37% of respondents who feel the opposite.

Among those who don't feel optimisitc about finding an affordable place to live in their current location, 40% say they will have to travel more than 50 kilometres to buy within their budget, while 21% believe they will have to search for a property within a 31-50 kilometre radius. What’s more, 18% say they would need to look within a 16-30 kilometre radius.

Only 9% of respondents are confident they could buy within 15 kilometres of their current location.

Half of those living in metropolitan sprawls like Toronto, Montreal and Vancouver say they would consider relocating to a more affordable city if they were able to find a job or work remotely. Among renters in these regions, 60% say they'd be willing to relocate, while 45% of current homeowners say they would consider it.

Empower Your Investments with Q Trade

Discover Q Trade's award-winning platform and take control of your financial future. With user-friendly tools, expert insights, and low fees, investing has never been easier.

Start Trading Today

Many feel renting is their only option right now

While housing affordability and availability remains out of reach for some Canadian renters, 29% hoped to purchase a home prior to signing their lease. Among them, 41% say the lack of a sufficient down payment led to their decision to rent instead.

When asked about the motivating factors behind their decision to continue renting rather than buy, 33% of respondents said they were waiting for better interest rates, while 30% are hoping for property prices to decrease. About a fifth (22%) said they are continuing to rent while saving for a down payment — 20% said they didn't even qualify for a mortgage (respondents were able to select more than one answer).

Nearly four in ten Canadian renters (36%) spend up to 30% of their net income on monthly rental costs. Meanwhile, roughly the same amount of renters spend between 31–50% of their income on rent, while 16% spend more than half.

In Vancouver and Toronto, the share of renters who spend more than half of their income on rent increases to 27% and 19%, respectively. That figure dips to 10% in Montreal.

The average national rent nationally for a two-bedroom unit in October 2023 was 8% higher than a year prior.

One third of Canadians currently live in rental accommodations, which is roughly 13 million people.

Sponsored

Trade Smarter, Today

With CIBC Investor's Edge, kick-start your portfolio with 100 free trades and up to $4,500 cash back.

Nicholas completed his master's in journalism and communications at Western University. Since then, he's worked as a reporter at the Financial Post, Healthing.ca, Sustainable Biz Canada and more. Aside from reporting, he also has experience in web production, social media management, photography and video production. His work can also be found in the Toronto Star, Yahoo Finance Canada, Electric Autonomy Canada and Exclaim among others.

Explore the latest articles

Credit card hacks for international travel

Many credit cards offer amazing travel benefits, but it's important to be mindful of fees, safety and hidden charges that can quickly add up

Winston Sih Journalism lecturer | Contributor

Disclaimer

The content provided on Money.ca is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.