The Voice of Canadian Credit Unions
Human Interest /  •

Take me higher

Rent is becoming less affordable in cities across the country.

There is a rule of thumb within the home rental sector: rent shouldn’t comprise more than 30 percent of an individual’s monthly income. In some metropolitan areas in Canada, such as Vancouver and Toronto, a number of factors have turned this standard into a punch line, due partly to a sharp reduction in supply. In Vancouver, for example, which has less than a one-percent vacancy rate, according to Canada Mortgage and Housing Corp., many rental units have been converted to Airbnb suites while “empty condo syndrome” — when investors snap up homes, then leave them empty — grips the city.

This past July, Padmapper released a list of the most expensive cities in Canada to rent. In several centres, the 30 percent rent-to-income ratio flies out the window. Statistics Canada reported in 2016 that the average wage for Canadians was just under $50,000 a year. Hence, in Vancouver, the average one-bedroom apartment would gobble up 50 percent of the average salary. The question is: how do individuals save for a down payment or squirrel away a retirement nest egg? Is the only solution to move? ◊