A recent study from Statistics Canada found that 1 in 6 newcomers rents their accommodation, and those who have arrived more recently are having a harder time finding affordable housing than immigrants who have been in Canada longer.
The study defines unaffordable housing as where more than 30% of pre-tax household income is spent on shelter costs. It uses renter data from Census 2021 but did not include those who arrived after 2019 when evaluating housing affordability.
It considers recent immigrants to be those who arrived in Canada from 2016 to 2021 and existing renter households as those in which at least one person has lived in the dwelling for longer than one year. It found one-sixth of recent immigrants (16.7%) lived in a recent renter household in 2021.
Statistics Canada says that of the recent immigrant renters, more than one-third (37.1%) were in unaffordable housing, compared with 23.2% of existing renters.
According to the Canada Mortgage and Housing Corporation's (CMHC’s) 2023 Rental Market Report, the demand for rental housing is spurred by an increase in the cost of home ownership. Simply put, would-be home buyers cannot afford to buy a house, so a higher share of the population has no choice but to search for rental accommodation.
Many newcomers need to find rental housing when they arrive in Canada because of the time it takes to establish roots in a new country.
Renting in Canada has become more challenging as the price of rent has significantly risen following the COVID-19 pandemic. The average price of a one-bedroom apartment in Canada is $2,149 according to rentals.ca. However, the price is typically higher in Canada’s largest urban centres, going as high as $2,976 in Vancouver and $2,614 in Toronto.
Census data from 2021 shows that the growth in recent immigrant renter households (+21.5%) was more than double that of owner households (+8.4%) from 2011 to 2021. This means renters were over twice as likely to be in unaffordable housing as owners.
It was also found that among renters who live in poverty, nearly 80% were living in unaffordable housing. The study says a recent rise in evictions, forcing renters to move at a time when the cost of renting is at an all-time high, is a contributing factor.
It says the median shelter cost of recent renters in poverty was $1,400 compared with $1,050 for existing renters in poverty.
One of the biggest contributing factors to the lack of affordable housing is that the average income of a newcomer is not keeping pace with rising costs. The average gross (total before deductions) starting salary of a newcomer to Canada is $51,480 according to Talent.com. It based the data on a sample size of 230 newcomers.
