Canadians are falling behind on their rent. A lot of them. Canada Mortgage and Housing Corporation (CMHC) data shows rent in arrears at purpose built rentals in 2020. Over 125,000 Canadians were behind on rent in October, with almost a third located in Toronto. Despite the large number, it likely only represents a fraction of those that fell behind.
Over 125,000 Canadians Have Rent In Arrears
Canada’s cities have tens of thousands of people that have fallen behind on rent. There were 125,200 people behind on rent as of October 2020, representing about 6.11% of private rental stock. The total of past due rent adds up to around $156.79 million, or 0.59% of the estimated $26.7 billion expected for the whole year. The annual rent number sounds huge, but for context homeowners paid $53.26 billion in mortgage interest over the same period. That number excludes the small, but very high interest, market of private lenders.
Canadian Rent Arrears
The number of units in purpose built apartment buildings (3+ units) with rent in arrears in 2020. Source: CMHC, Better Dwelling.Toronto Represents Nearly 1 in 3 Canadians With Rent In Arrears
Toronto is the largest CMA for rent in arrears, as one would expect due to the size and prices. There were 34,858 rental units in arrears by October, or about 10.68% of the rental stock. Rent in arrears adds up to an estimated $54.73 million, or about 0.92% of the annual rent collected. Toronto’s renters in arrear represents 50.36% of the total in Ontario, and 29.81% of the total across Canada. Any way you slice this number, the City is way over represented in the number of units with rent in arrears.
Canadian Rent Arrears Rate
The rate of units in purpose built apartment buildings (3+ units) with rent in arrears in 2020. Source: CMHC, Better Dwelling.Montreal Saw Over 19,000 Rentals In Arrears
Montreal has the second highest number of rental units in arrears. Not totally surprising, since it’s also the second largest market. There were 19,697 rental units in arrears by October, or about 3.26% of the total rental stock. The rent in arrears adds up to $31.21 million, or about 0.49% of the total annual rent to be collected. Montreal represents 68.64% of the total rental units in arrears across the province, and 16.85% of the total units in arrears across Canada. While it’s the second biggest number of units in arrears, the rate is nearly half that of Toronto. Rent in the city being a fraction of the cost, most likely helped reduce the number.
Vancouver “Only” Had 3,008 Renters In Arrears
Vancouver came in 9th for rent in arrears, despite being one of the largest real estate markets by volume. There were 3,008 rental units in arrears by October, or about 2.59% of the total rental stock. The rent in arrears works out to $4.84 million, or 0.24% of the estimated annual rent collected. Vancouver represents 52.91% of B.C.’s total units in arrears, or 4.86% of Canada’s total.
One factor why this number may be so low is the type of unit used for rental calculations. Vancouver has a sixth of the number of these types of units as Montreal. That makes the market more dependent on secondary units like condo apartments. Condo apartments are not included in today’s numbers.
These numbers are huge, but this isn’t a comprehensive survey of all rental units available. The data is only privately initiated apartment structures with three units or more. That excludes a huge number of rentals – from basement suites to condos. The latter in Vancouver or Toronto increases the number of rentals by three-quarters and half, respectively. That means the above numbers are really just a fraction of the total number of renters in arrears.
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Private arrangements, illegal suites, renting a room, etc.. A lot of people aren’t included if you’re only using purpose-built rental units. A lot of units also probably wouldn’t consider the renter in arrears, because they made an arrangement because they know if they re-rent, it will be at a lower rate. The number’s at least double, possibly even more.
It’s all fun and games to own a negative rate condo as a rental, until there’s a hiccup and you need to cover the rental difference + missing back rent.
Vancouver’s numbers are so low because everyone pays under the table for their basement suite. haha.
Also how you score cheap rent though.
Rent needs to be affordable i.e. under $700 per room. This can be done easily if the wording “Single Family Residence” is changed to “Single Room Occupancy” that would legitimise thousands of us i.e. 60% of owners, who rent to people who are not relatives. Strictly speaking all those who rent to people who are NOT relatives are doing so against the law which says “Single Family Residence”. This is absurd now as there are very few homes owned and occupied by a “Single Family” i.e. mom, dad and 2 kids. That was the previous understanding of Single Family. This law has to be updated to ” Single Room Occupancy” as Fredricton is now doing. This would allow thousands of landlords to rent at least 10,000 more rooms in the GTA and help solve this homeless, and affordable rental issue.