The struggle is real, according to nearly a third of Canadian households. This morning Statistics Canada (Stat Can) released the 2022 Canadian Housing Survey, a bi-annual window into the cost of living across the country. The latest findings reveal that both renters and homeowners are increasingly struggling. Renters were most likely to report financial difficulty, but homeowners aren’t faring well either. It’s not just mortgage costs, as the fastest-growing demographic experiencing financial difficulty was mortgage-free homeowners.
Nearly A Third of Canadian Households Struggle To Make Ends Meet
Canadians are increasingly struggling to make ends meet. The share of households reporting difficulty handling necessary expenses was a massive 30.9% in 2022, up from 20.4% a year prior. In other words, the share grew 51.5%—while actively compensating for the breakneck population growth. A troubling trajectory, showing an equally disturbing trend for both renters and homeowners.
Canadian Renters Are Most Likely To Struggle With Finances
Canadian renters are more likely to struggle with the cost of living post-pandemic. Nearly 2 in 5 (39.4%) renters struggled to make ends meet in 2022, compared to 28.8% in 2021. The share increased 36.8%—substantial growth, but not as fast as the average. Put a pin in that, we’ll circle back in a moment.
Breaking down the data, households in affordable housing are having a tougher time. In 2022, almost half (48.3%) of those in social and affordable housing reported struggling, compared to 38.2% of those in market rentals.
Canadian Home Owners Saw Financial Stability Erode The Fastest
Canadian homeowners are struggling less but saw sharper growth than households in rentals. The share of owner-occupied households struggling came in at 26.4% in 2022, up from 16.4% in 2021—when mortgage rates were at a record low. That’s 61% growth in a year for the share, much faster than renters have seen. While the share of those struggling is smaller, it’s still a steep climb.
Rising mortgage interest costs are an obvious driver of this issue, but not the only one. The share of struggling, owner-occupied households with a mortgage reached 33.8% in 2022, showing 59% growth from a year prior. In contrast, those without a mortgage hit 16.3%, but their share grew a mind-blowing 69.8% in a year. The demographic may have the smallest share struggling, but it was the fastest-eroding group.
Canadian inflation is slowing but households are most-likely facing harsher conditions. Interest rates peaked in 2023, after the survey was collected. Many mortgage borrowers also haven’t renewed since rates climbed either, and therefore haven’t experienced the “mortgage shock.” Though it’s worth emphasizing again—even those without a mortgage are increasingly struggling from the elevated inflation rate. A recent uptick to unemployment likely won’t help either.
And next year it will hit 75%
Inflation hit too fast especially with shelter costs. It will take a generation to catch up.
The cash-grab from cities is very real. Property fees, repairs, and services are climbing to ridiculous levels.
Pensioners. Though it says a lot about this country that the average house can be worth almost $1m, and that’s not enough for financial stability.
It’s the cost of housing that’s destabilizing the consumer and economy. When the chunk of income that normally used for savings, fun, and consumption gets sucked into bank profits – it benefits no one but asset holders who need it the least compared to those struggling to put food ok the table. 1/4 people are using food banks. That’s absurd. Look around you and count the people you see. A quarter of them are using food banks to stay alive.
Canada is in deep trouble.
Correct. And not just Canada but the over leveraged western world in general. Financializing an economy is the last desperate measure of empires in terminal decline.
That usury bill racked up since 1971 is due. Pay now.
Trudeau’s immigration policies have failed on two fronts: (1) unaffordable housing and (2) an increase in unemployment. The trickle-down effect includes healthcare and a rush for financial support backed by taxpayers. Other political parties that think they can mitigate these problems are delusional.
Thanks Justin!
Please increase immigration to help fix this mess!
The real estate industry is its own worst enemy now. Rents are tracked in the CPI and as long as shelter costs keep going up, BAC will be unable to reduce rates in a meaningful way. Just this morning US CPI again came in a tad high, making US fed decision on the Sep 17th meeting much harder. Expect a 0.25 cut, more jaw boning and that is it and BAC to make similar copy cat moves.
Brokers need bring rents down significantly so shelter cost component in the CPI comes way down so they can get that 0.50 basis jumbo reduction they dream of. And yes, they do have leverage on land lords to do it. If they could bid up during the boom times, they can run the bids down.
Many assume new migrants are unskilled, a bane on the system and arrive destitute. Health care is over ran amd has been broken long before the mass migration,that situation exacerbated the problem. Real estate, as an observer the demographics in expensive areas have changed dramatically over the past years. Who is buying the over $1 million homes in well to do neighborhoods? Many newcomers are. Let’s not forget , “They will own nothing and be happy” . Who exactly is that statement directed at? The current regime serves one purpose only: to decimate the middle class who once heartily donated to food banks are now using them with food banks turning people away while soaring bank profits land on the already over stuffed pockets of greedy investors. They’ve taken far too much thanks to cronyism and a complacent BOC who is in lockstep with those ” unelected bureaucrats”. This is mot the fourth industrial revolution. This is the demise of the Western world playing.out in real time.
This is not the Canada i grew up in. Welcome to the hunger games.
And to top it off, a 2 year laggard in stats.