RentSeeker.ca’s now socially popular rental market INFOGRAPHIC’s reflect data compiled from Canada Mortgage and Housing Corporation’s (CMHC) Fall 2017 report and includes vacancy rates and the average rent costs for apartments across Canada including;

• Studio Apartments
• 1 Bedroom Apartments
• 2 Bedroom Apartments
• 3 Bedroom Apartments

*for media inquiries or to share our INFOGRAPHIC, please contact us at media@rentseeker.ca

(Click on the INFOGRAPHIC to enlarge)

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The general rule of thumb regarding how much of your income should be allotted for rent is 30%. For many families, 30% of their income isn’t enough to afford a place to live and they need to spend more than that. This article shows that across the country 40% of renters spend more than 30% of their household income on rent and about 20% spend more than 50%. When a household is spending more than 50% of their income on rent, they’re at risk for becoming homeless, and that adds up to a lot of Canadians.

According to Canada’s largest real estate finder RentSeeker.ca, here are the average rent costs across Canada and here is the average cost of a house in cities across Canada.

What is Affordable Housing?

According to Canadian Mortgage and Housing Corporation (CMHC), housing is technically considered “affordable if shelter costs account for less than 30% of before-tax household income” and therefor affordable housing refers to a variety of programs and initiatives designed to help those in need.

As you can see the term ‘affordable housing’ is really an umbrella term referring to a variety of housing options that are funded from the private, public and non-profit sectors. From emergency shelters to subsidized housing, there is a range of programs designed to make housing affordable for people of all socio economic classes. Currently, the Federal Government invests approximately $2 billion into these initiates, and you can find more information about them here.

There has been a fair amount of talk in recent weeks about affordable housing, and what can be done to help those that need it. The CMHC states that 80% of Canadian housing needs are met through the open market, affirming the need to help a large number of Canadians find housing options within their means. As the national real estate market continues to explode, this issue is becoming increasingly relevant. RentSeeker is here to offer some insight into the current events that are greatly affecting the affordable housing real estate market.

The Canadian Real Estate Boom

Simply put, the real estate boom in major cities is creating affordable housing issues. The increase in the real estate market has a direct affect on rental prices, and as one increases so will the other. Foreign investment in condo opportunities has also played a part in driving up costs, but this is pale in comparison to the overall growth that popular cities have experienced in recent years. Despite the number of people waiting for a crash or even a market correction, there are no sign it will anytime soon.

Newcomers Moving to Canada

There are no shortage of jokes and memes in the media about the foreign desire to move to Canada. Whether you live in a country that is terrified about the potential of a presidential candidate winning or your country voted to ‘go solo’, Canada is a much more realistic home for many people across the world that may never have considered it before recent events. If even a small number of people who say they will move actually do so, Canada could experience a huge immigration increase in the next few years. Increasing the number of newcomers above what the country already experiences would drive up the demand for rental units, thereby making the rental market more competitive.

Turning Neigbhourhoods into Vacation Destinations

Affordable housing doesn’t just affect those living in the big cities. Areas that have become popular as vacation destinations can have a devastating financial affect on locals who can’t afford to keep up. In Ontario, the Muskoka region has seen a huge increase in housing prices just as the Okanagan region in British Columbia. For many families who have lived in these regions for decades, the cost of living has simply gotten too high.

Accessible and Adaptable Homes

These homes enable both the elderly population and those living with needs to remain in their communities, and advocates say there isn’t enough being done to help them. Accessible homes can be costly, as modifications need to be done in order to accommodate the needs of the people who live there. For many landlords, this isn’t a tempting investment when compared to utilizing development opportunities on the open market. As the Baby Boomers age, the increase of the aging population will put more stress on the system, and many are worried that retirees will have little choice but to move out of their home in search of more affordable options.

Affordable housing is a complex social issue, and unfortunately, there will always be those in need of these important services. While cities like Vancouver are ranked extremely high for unaffordable housing (just behind New York and London) there is work being done from both the private and public sectors to improve the lives of Canadians across the country. Affordable housing affects thousands of Canadians and it’s important to know what the term actually means as it becomes more prevalent in the media along with the importance of our national real estate market.

Some factors which has led Canada to rank fourth place among the world’s hottest real estate markets include;  the lower Canadian dollar which has increased foreign interest and demand for Canadian real estate.

Coupled with the weaker Canadian dollar, is the Bank of Canada’s keeping of interest rates low, which in-turn has helped fuel the rise in housing costs across the country.

And to top it off, Canada Mortgage and Housing Corporation announced in September 2015 the new CMHC Flexibilities for Affordable Housing – allowing new home owners to use 100% of gross rental income of secondary rental suites when applying for CMHC insured mortgages (*restrictions apply to this new provision so readers should refer to the CMHC website for more detailed information on this new provision).

Many regulators,  economists and investors are watching Canada’s housing market closely with varying views and perspectives on the final outcome. Some are speculating a “crash to come“,  while other well respected real estate investors like Canada’s largest Real Estate Investment Trust’s CEO, Edward Sonshine of RIOCAN,  who feel there is little risk of a correction while the vast majority of property is in responsible hands.

Given all the speculation around the housing market, many financial advisors are trying to provide their best advice for their clients, whether they are renters thinking about purchasing their first home, or current home owners or retirees who might be looking to downsize and wondering if this is the right time to sell and reconsider their financial planning.

The Canadian Real Estate Association (CREA) recently published median home prices for cities across Canada. As expected, cities like Vancouver and Toronto topped the list with the average price for a home in Vancouver coming in at $857,015. And the average price to for a home in Toronto coming in $627,395.

View RentSeeker.ca’s INFOGRAPHIC showing the average income needed to purchase a home in cities across Canada

*RentSeeker.ca will be publishing a full report on this data in the coming month(s):

For our readers benefit, we also include the average rent cost for a 3 bedroom apartment in the cities listed below for cost comparison purposes:

To view the average rents for apartment rentals across Canada, you can view the full RentSeeker.ca data from our recent INFOGRAPHIC – The Average Cost of Renting an Apartment in Cities across Canada.

Here is a snapshot of some preliminary data for 5 cities across Canada showing the current 2015 average home prices compared to 2014, with Year over Year (Y-O-Y) percentage increases.

• Toronto 

2015 –  $627,395

2014 –  $575,676

Y-O-Y increase: 9.4%

Average Rent for a 3 Bedroom Apartment in Toronto  – $1,495 (per month)

• Vancouver

2015 –  $857,015

2014 – $836,735

 Y-O-Y increase:  2.4%

Average Rent for a 3 Bedroom Apartment in Vancouver – $1,369 (per month)

• Ottawa

2015 – $366,145

2014 – $357,753

Y-O-Y increase: 2.3%

Average Rent for a 3 Bedroom Apartment in Ottawa – $1,482 (per month)

• Montreal

2015 – $343,452

2014 – $329,574

Y-O-Y increase: 4.2%

Average Rent for a 3 Bedroom Apartment in Montreal – $920 (per month)

• Winnipeg

2015 –  $274,541

2014 – $263,859

Y-O-Y increase:  4.0%

Average Rent for a 3 Bedroom Apartment in Winnipeg – $1,205 (per month)

Readers can utilize websites like RateHub.ca‘s Mortgage Affordability Calculator to determine the income required,  the estimated mortgage payment, as well shop mortgage rates.

Most of Canada’s “big banks” offer tools for users as well, including:

• CIBC
• TD Canada Trust
• Scotia Bank
• Bank of Montreal 
• Royal Bank of Canada

There are of course other costs to keep in consideration as well when making a decision to purchase a home. Here is a great article from Romana King of MoneySense Magazine providing some great information for consideration.

Follow RentSeeker.ca on Twitter and Facebook to stay up to date on all the latest rental market and housing news across Canada!

RentSeeker.ca, Canada’s leading Apartment and Housing Finder has published the House Price Analysis and Assessment information in an INFOGRAPHIC for readers to be able to view the Housing Price Analysis and Assessment in a snap-shot form for easy reference.

(Click on the INFOGRAPH to Enlarge)

The overall assessment of risk detected by the framework is high for Toronto, Winnipeg and Regina. In Toronto, the high overall risk reflects a combination of price acceleration and overvaluation. The high level of risk in Winnipeg reflects risks of overvaluation and overbuilding, while in Regina it reflects price acceleration, overvaluation and overbuilding, particularly of condominium apartments.

“Nationally, CMHC continues to detect a modest risk of overvaluation. However, our overall assessment of the risk of problematic conditions varies from centre to centre due to regional differences in housing markets. Imbalances in local housing markets could be resolved with further moderation in house prices or improving economic conditions,” said Bob Dugan, CMHC’s Chief Economist.

“In the case of Toronto, strong price acceleration in 2015 reflects a larger share of sales of pricier homes. The rise in house prices have not been matched by growth in personal disposable income, giving rise to a modest risk of overvaluation”.

The risk of problematic market conditions continues to be assessed as moderate for Montréal and Québec due to the detection of some risk of overvaluation.

In Toronto, Ottawa and Montréal, we are monitoring the risk of overbuilding. Condominium units under construction are near historical peaks. Inventory management is therefore necessary to make sure that these condominium units under construction do not remain unsold upon completion.

Low overall housing market risk is observed for Vancouver, as none of the individual risk factors are currently detected.

The results released today include those for the national market as well as 15 Census Metropolitan Areas (CMAs) – Vancouver, Victoria, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto, Hamilton, Ottawa, Montréal, Québec, Moncton, St. John’s and Halifax (with Victoria, Hamilton and Moncton being added from the previous report released in April).

The centres recently added, Victoria, Hamilton and Moncton are assessed as low overall risk. None of the risk factors are detected in Victoria, while overheating is detected in Hamilton, and overbuilding in Moncton.

The HPAA is a comprehensive framework that is designed to assess housing market conditions by taking into consideration the economic, financial and demographic drivers of housing markets. The use of multiple indicators of housing conditions, which incorporate various data sources and price measures, provides a robust picture of overall housing market conditions.

CMHC’s HPAA framework is designed to detect the presence of problematic conditions in Canadian housing markets. The HPAA framework assesses housing market conditions and considers the incidence, intensity and persistence of four main risk factors:

1. Overheating of demand in the housing market, wherein demand significantly outpaces supply.
2. Acceleration in the growth rate of house prices, which could be partially reflective of speculative activity.
3. Overvaluation in the level house prices which could be partly reflective of speculative activity.
4. Overbuilding of the housing market, which suggests that supply significantly outpaces demand.

For those who feel that given the overall assessment, renting an apartment might be a better option than purchasing a home, RentSeeker.ca offers a database of thousands of apartment listings across Canada.