Rising Rents Consume Majority of Income for Half of Young Canadians

Roughly half of young renters and a third of tenants at all ages are spending the majority of their after-tax income on rent, according to a new report.

 

Experts say the survey, which was published by Rentals.ca this week, shows that the adage of limiting your rental expenses to one-third of your income is simply no longer possible for many Canadians – a situation that could threaten the ability of renters to adequately save for retirement.

 

“It’s a benchmark that young renters are taught by their parents, or many financial advisers say is the amount you should spend for housing,” said Giacomo Ladas, a spokesperson for Rentals.ca.

 

“By this survey, it becomes really clear that that’s almost impossible, especially when we’ve seen rental prices skyrocket in recent years.”

 

Mr. Ladas said 49 per cent of people aged 18 to 24 and 34 per cent of all renters indicated that they spent more than half their income on rent. Fifty-seven per cent of all respondents said they were considering moving to a new city because of high rent costs.

 

The survey also found that 46 per cent of people who spend more than half their income on rent have spent six or more months searching for new apartments. Mr. Ladas said that the statistic illustrates that the rental market, which has been sluggish with declining prices throughout 2025, hasn’t yet softened enough to spur people to move.

 

He pointed to Edmonton as an example of a town that used to be affordable but has seen average rent prices shoot up by 27 per cent in the past three years.

 

“All I know is wages haven’t increased by that much,” Mr. Ladas said.

 

Andrew Dobson, an advice-only financial planner with Objective Financial Partners, said anyone spending more than half their income on rent will likely be unable to save enough money for retirement, even across decades.

 

“There’s very little wiggle room to save any money where housing costs are that high,” said Mr. Dobson, who added that inflation is also affecting other areas, further limiting the ability to put money aside.

 

In 2024, a report by Royal Bank economist Carrie Freestone came to the conclusion that renters are facing increasing difficulties in accumulating wealth compared with homeowners.

 

It found that homeowners have seen their net worth increase by nine to 13 times household disposable income since 2010. Renters, meanwhile saw their net worth grow from three to three-and-a-half times in the same period.

 

Ms. Freestone also found that renters were spending a greater share of their income on housing – even more than homeowners – further preventing them from becoming homeowners and building wealth in the long term.

 

Mr. Dobson said he is seeing cracks in some of Canada’s largest rental markets, where landlords simply cannot find renters at the price they need to charge to break even.

 

In a recent analysis of one of his client’s rental properties, Mr. Dobson advised that selling the unit was the best option, since renting would mean losing money.

 

With many rental owners facing this situation, and many renters remaining on the sidelines, Mr. Dobson said there could be hope for renters that cost declines this year will continue.

 

 

 

This article was first reported by The Globe and Mail