‘Throwing money away’
Nearly half of Canadians call renting a waste, survey says
It’s hard for Vanshika Dhawan not to
think of the $1,400 a month she pays for her half of a shared two-bedroom apartment at Bloor and Church as wasted.
“It’s partially because I was raised to believe that renting was throwing t money away. It extends from my parents’ generation,” says the 22-year-old
grad student. “There’s no investment involved in renting.”
But at the same time, saddled with student debt and spending so much on rent, she knows she can’t afford a down payment on anything in Toronto. “It really isn’t a choice,” she said. A new survey from real estate company Zoocasa found almost half of respondents across Canada feel like rent is a waste of money (46 per cent), despite the fact many find themselves unable to buy, caught in a Catch-22 be- tween high rents and impossible home prices in an increasingly unaffordable market.
“We’re in a situation now, especially in Toronto and Vancouver,” where rent is so high, “that it doesn’t really make as much sense to stay renting if you don’t have to,” said Penelope Graham, managing editor at Zoocasa.
The survey results show Canadians still view home ownership more favvourably, as it contributes to equity, ““whereas rent is very much viewed as a sunk cost,” she said. At the same time, more people are forced to stay in the rental market for longer because buying is out of reach.
In Toronto, the average detached home costs about $1.3 million, according to the Toronto Real Estate Board, wwhile the average rent for a one-bed-w room apartment is now more than $2,000, say figures from market research firm Urbanation. m
That leaves people like 27year-old Fahd Pasha, who always saw owning a home as part of the “Canadian dream,” out of luck.
He’d like to buy something with his partner, and not just be making his landlord money. But even though they’re both working full time, it seems impossible.
“We think we make at least respectable incomes, (but) it’s not even qualified for even the most tiniest of one-bedroom condos in the city,” he said.
“You can go deep, deep, deep into debt or you just live a comfortable life and you accept the fact that it’s more likely than not it’s going to happen at a very late stage in your life or not happen at all.” The Zoocasa survey also found 74 per cent of all respondents felt owning a home was an important milestone, and the top reason for renting, at 31 per cent, was not being able to afford a mortgage that meets their needs.
Sixty-six per cent of renters felt if current market conditions persist, buying their dream home will be out of reach.
And a whopping 71 per cent of those surveyed, 81 per cent of renters, believe the federal government should be doing more to improve housing affordability.
“Clearly renters are feeling that more needs to be done to help them get into the market,” said Zoocasa’s Graham.
Paul Kershaw, who heads up Generation Squeeze, a lobby group focusing on the struggles of young adults to pay for housing and child care, said renting is not “inherently a waste of money.”
Renters have more flexibility in their investments and can be more mobile because they’re not tied down to a property.
But the rising home prices that have far outpaced earnings and high rents have created a “vicious cycle,” where many renters feel trapped.
Kershaw is pushing to level the playing field for renters through a new campaign called We Rent.
This can be done through measures like a tax on homes over $1 million, or a special tax credit for renters, he said.
It’s intertwined with creating more supply, through things like adjusting zoning to allow more density in single family home neighbourhoods and buildings just for rentals.