Increasing residential rental rates are getting too expensive for many Canadians, writes Peter Watson.
The increasingly tight residential rental market could put a strain on individuals’ personal finance.
When we think of real estate our focus tends to be on homeownership and escalating prices due to supply and demand realities. More people want to buy a house than the available supply.
The result is escalating prices. This same supply and demand pressure is providing upward pressure on rental rates.
“We’re having an affordability crisis across the country,” explains Ricardo Tranjan, who is a political economist at the Canadian Center for Policy Alternatives.
COVID-19 put a temporary dampening effect on the residential rental market. But as we start to return to normalcy, strong demand is having upward pressure on rental rates.
Some have sold their house and have entered the rental market. Immigration will return to pre-pandemic levels, and they will need a place to live.
University students are getting ready to return to school. They too need accommodation.
The job market is strong and many, including recent graduates migrate to Toronto. That pushes rental rates higher and has a ripple effect on smaller communities close to the GTA.
Financial security, for some, could be out of reach because of housing costs.
You might be well qualified, eager to work and very employable. What happens if you can’t afford the rent being charged on accommodation close to your place of employment? What happens if you cannot find accommodation?
Canada has a housing problem. Finding a rental unit can be difficult. Being able to afford it might be more than your personal budget can afford.
Ontario prides itself as “a place to grow.” What many people need right now is a place to live.
Those that rent depend on a reasonable supply of affordable options.
Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com
