The housing market is showing us there's not enough supply for rentals: Economist
While rent prices have skyrocketed in cities across Canada, Moncton, N.B, is actually where affordability has dropped the most.
A new study from Online Mortgage Advisor compared one-bedroom rental prices between 2018 and 2022, with the change in average worker salaries in the same time frame. It found that rent in Moncton is now eating away at 11.31 per cent more of residents’ salaries than it was four years ago, making it the biggest increase in the country.
Moncton’s change in affordability is more than five percentage points worse than the second city on the list, Windsor, Ont., where rents increased to cover 6.23 per cent more of renters’ salaries.
Toronto renters paid 45.51 per cent of their salaries on rent in 2022, which is actually an 11.75 per cent improvement from 2018, the largest in the country. It also marks the biggest affordability improvement in North America, the study said.
According to the Canada Mortgage Housing Corporation, the average rent for a one-bedroom apartment in Toronto climbed $266 between 2018 and 2022, meaning the improved affordability was likely due to wage increases in the city.
Meanwhile, rental affordability improved by 10.78 per cent in Brampton, Ont., and by 9.73 per cent in Vancouver.
VICTORIA WORST FOR OWNERSHIP
When it comes to buying a property, Online Mortgage Advisor compared the square metres an average salary could afford in 2018 compared to 2022 and found residents in Victoria are being priced out the fastest.
Average earners in Victoria could only afford 4.5 square metres of property in the city, a drop of two square metres since 2018.
Meanwhile, Edmonton saw the second-biggest purchase affordability improvement in the world, at an additional 8.1 square metres, while Calgary’s additional 2.9 square metres was sixth in the world.
The research comes as the Canadian government tries to control housing affordability in the country.
Earlier this month, the federal government announced a cut to the GST on all new rental builds, a move developers have largely praised.