For the longest time, Canada’s renters have been the subject of much ridicule and discrimination—vitriol that could have been channeled into more productive activities towards addressing the affordability crisis.
“The last socially encouraged form of intolerance is directed at people who rent instead of owning a home,” markets observer Rob Carrick wrote in his November 24 column for The Globe and Mail
“It’s a core value of our society that people own a home,” Carrick said. “But there’s no getting around the fact that as house prices climb, the home-ownership rate will fall. The result is more renters.”
Citing figures from Statistics Canada, the analyst said that the country’s home ownership rate stood at 69 per cent. While far above the 65 per cent of France and the 63.5 per cent of the United States, the number still reflects the not-insignificant portion of the urban consumer population that chooses to rent instead.
“If house prices keep rising, we’ll need to get over this narrow-mindedness. In expensive real estate markets, it’s both common and accepted that a majority of households rent,” Carrick stated. “Those who cannot afford to own houses in the city have recourse – they can buy in the suburbs and commute to work, scale down to an urban condo or share a home with friends or family. A lot will just rent, and that’s sensible.”
Carrick added that demographic factors played a major part in this development, considering that young professionals have for the past few years been struggling with static incomes and ever-growing costs.
“In households in which the primary payer of rent or the mortgage is under the age of 35, $60,000 in total household income is the threshold where people become more likely to own than rent,” he explained.
As a more financially manageable option, it is understandable why many millennials will go for that route.
“Money saved as a renter can be used to build investments that offer comparable wealth to a paid-off house over the long term,” Carrick said.