Canadians spend between 35 and 50 per cent of their monthly income on housing and utilities, according to the government of Canada. For many, keeping up with the bills is not easy.
Ali Jafri’s rent is due on Monday, and he’s not sure he will be able to pay it.
“(The) 15th of the month is just a few days away and I am in a difficult spot right now,” the Toronto father told CTV News. Jafri has a job, a child and lives in a tight-knit community in downtown Toronto, but with the cost of living stubbornly high, he says he’s being squeezed.
“We want to make a life here, we are doing all the right things, but we are falling behind,” he said. “This is not a sustainable situation.”
The Canada Mortgage and Housing Corporation (CMHC) released its annual rental market report on Thursday, which shows that despite an increase in purpose-built rentals and an increase in the vacancy rate, there has not been a corresponding drop in the average price of rent.
According to the CMHC, the average monthly rate for a two-bedroom, purpose-built rental unit was $1,550, an increase of 5.1 per cent compared to last year.
Vacancy rates rose in almost every major city with the national purpose-built rental vacancy rate increasing to 3.1 per cent, an increase from 2.2 per cent in 2024.
“The affordability challenges are still very present,” said Tania Bourassa-Ochoa, the deputy chief economist at CMHC. “That has not gone away.”
Where rental prices are dropping is in higher-end units, but Bourassa-Ochoa says there are signs that less-expensive units could soon see a drop in rent, as well.
“These newer, more expensive units are actually freeing up some of the … more affordable ones," she said.
The CMHC report also notes that due to an increase in available units, many landlords are now offering incentives to entice would-be renters, including a month of free rent or internet.
Bourassa-Ochoa warns it could take years for the full effect of housing policy changes to be felt throughout the rental market, but says there are signs new policies appear to be working.
“What we’re seeing right now is really the fruit and the result of strong support from all levels of government: federal, municipal, provincial,” she said. “We’re seeing a lot of programs that have been put in place, different products to help developers … push those projects out the door.”
While housing starts were down in October compared to the month before, there are nearly 200,000 rental units slated to be completed in the next 12 to 18 months, something experts say will keep the vacancy rate high and likely help with the cost of rent.
With files from CTV News’ Kristen Yu
