Canadian real estate insanity has officially spread to every corner of the country. The Canadian Centre for Policy Alternatives (CCPA) conducted a rental affordability study across Canada. The non-partisan organization found minimum wage employees can’t even afford to rent these days. Minimum wage earners can only afford to rent an average one-bedroom in 3 small cities – all in Quebec. Cities like Vancouver are so far out of whack, minimum wage employees need more than two jobs to afford a rental.
Minimum Wage Earners In Most of Canada Can’t Live Alone
Looking to live a Canadian pharaoh and rent a tiny one-bedroom apartment? Even that’s a now a pipe-dream if you’re earning minimum wage in Canada. Renting the average one-bedroom in Canada now requires a wage of $20.20 per hour. This means millions of adult Canadians working full-time can’t afford to live on their own. Yes, rent. Yes, a one-bedroom.
Only 3 Cities Are Affordable To Rent… They’re All In Quebec
The average one-bedroom apartment is only affordable in 3 cities if you earn minimum wage. Saguenay requires a minimum wage employee to work 30 hours to afford a one-bedroom. Trois-Rivieres was the second most affordable, requiring 31 hours of work. Sherbrooke followed with 33 hours to make a one bedroom affordable. That’s it. In case you didn’t notice, only small cities in Quebec made the list for average affordability.
Canadian One-Bedroom Rental Prices
The number of hours at minimum wage per week needed to afford a one-bedroom apartment rental across Canada.
Source: Canadian Centre for Policy Alternatives, Better Dwelling.
The least affordable cities are Vancouver, Toronto, and Victoria – in that order. Vancouver requires 84 hours of minimum wage work to afford a one-bedroom rental. Toronto followed with 79 hours to reach affordability. Victoria came in third, with an average rental requiring 67 hours of work at minimum wage. In case you missed it, Vancouver requires more than two minimum wages to rent a one-bedroom.
Even Below Average Rentals Are Scare
Sure, but that’s an average one-bedroom. There has to be some neighbourhoods in cities where they can afford a one-bedroom, right? Not in cities like Toronto, Vancouver, or Calgary. Actually, that’s the case in 25 of the country’s 36 census metropolitan areas (CMAs). Not one single neighborhood has an average one-bedroom rental rate affordable for minimum wage earners. The affordability problem isn’t just confined to big cities, it’s most of Canada.
Canadian One-Bedroom Rental Neighborhood Affordability
The percentage of neighborhoods in each city where the average one-bedroom price would be affordable for a full-time minimum wage employee.
Source: Canadian Centre for Policy Alternatives, Better Dwelling.
The study reveals fundamental issues regarding the state of Canadian real estate. There are millions of adult Canadians paid minimum wage for full-time work. The issue has long been obvious in markets like Toronto and Vancouver. So-called “bubble cities,” have made it impossible for low wage earners to afford the city. Not huge news. However, the issue is systemic when low wage earners can only afford to rent in just 3 cities across Canada.
Like this post? Like us on Facebook for the next one in your feed.
Interest rates below inflation. Devalue the money, inflate the assets. The BOC started to discuss the issue as early as 2013, then stopped talking about it. Now since they hired Poloz, who comes from the EDC, he’s only fixated on exports. If you thought Toronto was overvalued, wait until you see how much these small cities are going to need a correction to get back to normal.
The price/immigration narrative really falls apart when you realize it’s an issue with all cities. Wonder if Canadians will realize at some point prices aren’t set by density or labor that goes into the product, they’re set by the amount they can pay. That amount is influenced by through things like rate suppression. They kept rates too low for way too long.
Rate suppression is still happening. $500 million injection into CMB from the Bank of Canada. They call it “normal” asset buying, because they need to buy something with that 2% increase they’re aiming for. But the they’re buying on a non-competitive basis, which means they pick up only when there’s a lack of demand.
I think the causes are money laundry, overseas, and local speculators. To solve housing crisis, kick out overseas, stop money laundry, charge 100% tax to local speculators! Canadians need living right in their country! Not being kicked out by overseas! In last 3 years, I only heard overseas bought properties in GTA in my network. Not Canadians, not immigrants. Shamed Canadian government! Makes Canadians lose living right!
Minimum wage in Ontario and Alberta isn’t rising with inflation. That’s compounding the issue. It needs to rise to a level that’s sustainable. No one should work a full-time job, and not be able to afford basics like rent – not even ownership. We’re just a few steps from cage homes.
Raising wages flips the narrative that prices are right, and wages are wrong. In actuality, the only thing rapidly increasing prices are the value of real estate. Inflation targeting makes sense, until you realize it’s an arbitrary number and sometimes inflation shouldn’t be at the point it is.
Increasing minimum wage rates lets bum landlords know that their cheap, rundown units can now rent for more. Because their minimum wage earning tenants can be squeezed for more. I have seen this happen in a small town in Southern Ontario right after the minimum wage was hiked by 30+%
I’m in favor of minimum wage moving with inflation, but absolutely not just for the purposes of accommodating rental prices. Prices across Canada are up more than any other country in the G8, and despite the narrative, it’s not just Toronto and Vancouver. Regions like Niagara and Victoria outperformed Toronto and Vancouver. Raise interest rates. Let the monetary excess become absorbed.
And middle class can’t afford the purchase of homes even with a healthy down payment. It all comes down to do you want most of your pay going towards mortgage, taxes, upkeep or do you want to live and save for retirement. Although lately seems you cannot do either. Rent is too high even out of Toronto, and purchasing a dilapidated house while taking out HELOC completely unaffordable. At the end of it you are left with nothing but debt.
Rental affordability is a bigger deal than owning. Not everyone needs to own a home, but everyone requires shelter.
There’s 4 million Canadians earning close to minimum wage, which is about 1/4 of all Canadians. At that rate, we won’t be able to scale up minimum wage jobs in the country, without raising minimum wage. Raise minimum wage, you get basic service inflation which impacts everyone’s affordability as well. Quite the pickle.
The only sensible solution is a nation wide real estate crash triggered by higher interest rates. Let the Over indebted would be Feudal Lords have a taste of the whip they themselves have been so cheerfully wielding. No matter which way we turn: the future is going to hurt.
Smart Planning i.e. the new Urbanism, always results in unaffordable housing. The time for people to grasp the connection between excessive density and unaffordability is past due.
Four decades of corporate tax cuts have withdrawn the province and the Feds from city building. Growth pays for growth is not working too. New Urbanism is just cover for the real problem nobody wants to face.
This is exactly it, SUMSKILLS. I’m not anti-New Urbanism, but it’s papering over cracks at best.
This is a very serious issue and risks ripping our society apart, perhaps thats the endgame of crooked bankers.
IMO min wages are already too high for unskilled labor in ont and raising it will just speed up automation or move businesses offshore, reducing jobs.
The real cure is to just raise the damn interest rates and everything will normalize. But people are too short sighted to realize short term pain equals long term prosperity.
Housing needs to stop being a Store of value. Its one thing for your average pleb to miss out on all time high stock market gains (you cant live in a stock), or even home ownership (not a right despite what socialists tell you), but to not be able to afford rent in some middle of nowhere town is ridiculous. If cdns werent so dumb there would be riots in the street right now to end the BOC monopoly.
The market should decide interest rates, not some crooked bankers!
So you want riots? What is the solution that you propose other than criticism of left and right?
I am shockingly fine with riots. Do I have the guts to throw the first brick? Heck no. But a few months of riots in Canada’s cities wouldn’t be the worst thing.
Greed, greed F ing greed. And, the great Canadian rip-off continues.
‘Canadian real estate insanity has officially spread to every corner of the country.’ I would agree, its become a mess all over the country…prices are crazy here in Ottawa…straight up for the last 20 years with no end in sight…buying or renting…a reset, crash, something needs to happen…and soon…people are struggling.
20 years of mass immigration – highest rate in the Western world aside from New Zealand – will do that. The focus is on bringing in more bodies to jack up the GDP even if it means destroying our quality of life.
Canada’s 4 Main Industries:
Debt
Immigration
The Weak Loonie
& Money Laundering.
Canada is a finished nation. Inflation is simply to high and it is killing investment in Canada. Go on YouTube and type in the search bar, Bangkok walking video. There is a couple of video of people walking in down town Bangkok. After watching these videos you will realize that Canada is a third world nation , not Thailand. Even Vietnam is modernizing itself fast.
This is from Wikipedia, I don’t how accurate it is
Thailand is a newly industrialized country. Its economy is heavily export-dependent, with exports accounting for more than two-thirds of its gross domestic product (GDP). In 2018, according to the World Bank, Thailand had a GDP of 16.316 trillion baht (US$504.9 billion), the 8th largest economy of Asia.[30] As of 2018, Thailand has an average inflation of 1.06% percent[31] and an account surplus of 7.5 percent of the country’s GDP.[32] The Thai economy is expected to post 3.8% growth in 2019.[33] Its currency, the Thai Baht, also ranked as the tenth most frequently used world payment currency in 2017.[34]
https://en.wikipedia.org/wiki/Economy_of_Thailand
Canada is dedicate at destroying it currency through inflation and mass migration.
If you are young and have no debt and asset, maybe you should travel the world before deciding to invest time and energy in Canada.
What is the definition of afford being used here? Spending less than 30% income?
Surely more mass immigration is the answer! In fact, according to the current government, that’s the answer to everything isn’t it?
Why are people still living in a one bedroom to themselves? What makes these deplorables feel they are entitled to live in a 600 square foot luxury 50+ year old apartment? There should be a minimum of 4 bunk beds to a bedroom. Oh and Landlords outta have the right to charge for water per gallon now that there are so many people living to a single bedroom unit. You know you gotta cover your loses… – Slum Landlord of Toronto