B.C. has more renters who are spending at least half their income on rent than anywhere else in Canada, according to a new report.
But despite the financial challenges, the Royal LePage 2024 Canadian Renters Report also finds many are looking to buy their own place.
It suggests 26 per cent of renters in British Columbia say they considered buying a property rather than renting before signing or renewing their lease, and 27 per cent say they plan to purchase a property in the next two years, while 52 per cent will not.
Of those who do not plan to buy a home in the next two years, more than half say they feel their income is not high enough to afford a property. That number rises to more than 60 per cent among younger renters, those aged 18-34.
“With a boost in rental supply in Vancouver, competition in this segment is improving, although affordability remains a challenge for tenants facing some of the highest rental prices in the country. Still, demand to live in one of Canada’s most popular cities remains consistent,” said Nina Knudsen, property manager, 11 Royal LePage Sussex in North Vancouver.
“Empty nesters and working professionals make up a significant portion of our renter demographic, as do tenants who are landlords themselves. It is not uncommon for renters to buy an investment property in a less expensive market and lease it out while they continue to save towards the purchase of a primary residence,” she added.
Royal LePage says among renters living in British Columbia, 23 per cent spend up to 30 per cent of their net income on monthly rent costs, while 42 per cent spend between 31 and 50 per cent of their income. A quarter of renters spend more than half their net income on rent, well above the national average of 16 per cent.
“As interest rates have increased over the past two years, higher monthly carrying costs have put considerable strain on entrepreneurial landlords, prompting some to offload their units onto the resale market,” said Knudsen.
“With rates now beginning to trend downward, some investors may be seeing a light at the end of the tunnel. However, the most recent rate cut by the Bank of Canada will not be enough to encourage those landlords from selling their properties if further cuts are not made in the near future.”