Three out of five homeowners are saddled with mortgages. But in many ways it’s harder being a renter.
Statistics Canada finds that a significantly larger percentage of renters are overextended than homeowners in this country. That’s one of the more noteworthy findings in its National Household Survey (NHS) data released this week.
Other highlights:
- 4 in 5: Households buying a home between 2006 and 2011 had a mortgage in 2011 (79.7%)
- 58.6%: Of owner households had a mortgage overall
- $1,141: Average monthly shelter cost of a homeowner
- It is $848 for renter households
- $1,585: Average monthly shelter cost of a homeowner with a mortgage
- The average mortgage payment in 2011 was roughly $1,074 per month
- 26.2%: Of homeowners with a mortgage spent more than 30% of their gross household income on housing (StatsCan’s threshold of “affordability”)
- That’s 1.4 million households
- They pay $1,776 per month on average, $688 more than what StatsCan’s “30% of income” rule of thumb suggests
- Says TD: “It is interesting that shelter costs have risen for homeowners even though mortgage rates were at record low levels.”
- This number was amply hyped by the media but lenders, default insurers and regulators have targeted, and will increasingly target, homebuyers who overextend themselves. Just as telling (if you believe these numbers) is that almost three-quarters of Canadian mortgagors have budgeted prudently.
- But there’s a chance this 26.2% may be somewhat low. StatsCan’s NHS was voluntary, so low-income homeowners might not have responded in proportionate numbers (due to well-known response biases). That may have skewed this figure lower.
- 40.1%: Of renters spent more than 30% of their income on housing
- That’s 1.6 million households
- They pay $928 per month on average
- With tougher mortgage regulations prompting increased rental demand, this 40.1% number could grow (and it may be biased lower already, for the same reasons as above).
- 69%: Of households own homes
- That’s 9.2 million households out of 13.3 million
- This number has changed little since 2006
Chart source: TD Economics, Statistics Canada
- $76,600: Median family income (in 2010)
- Here’s where the money is: Income Map
- Median individual income for full-time workers was $47,868 in 2010
Given the questions about StatsCan’s new survey methods, we have purposely avoided comparing most of this data with prior years.
Sidebar: Housing costs for mortgagors, as defined by StatsCan, include mortgage payments, electricity, heat, water and other municipal services, property taxes and condominium fees.
Rob McLister, CMT
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Last modified: April 26, 2014
Bring back the long form census!
Insurers let people go to 39% GDS, plus electricity. IMO, over 30% is too low of a bar to call shelter payments unaffordable. People routinely manage over 40% of income on housing. It just depends what other debt they have.
Just imagine if credit didn’t exist at all and everyone is required to live according to what they actually have …
You imagined most people wouldn’t be able to exist even a year, right ? :)
So sad.
We spend 35% of our gross family income on home expenses, meaning mortgage, property tax, condo fees and utilities. I find that very affordable in Toronto. Limiting yourself to 30% of income wouldn’t get you much around here.
The stat I like to highlight from the survey indicate that more than 40% of homewoners are mortgage free.
And another stat I love is CAAMPS 2012 report that indicated that 600,000 Canadians have a HELOC with zero balance.
Much to the chagrin of the permabears, many more Canadians are also following these financial footsteps and are well on their way to debt-free status, joining the truly financially secure, through home ownership.
These stats are national and don’t reflect the situation in most geographical locations. $1074/month for a mortgage, that’s a $225,000 house/condo at 3%, good luck finding that in the 2 major metro’s. It might be a good idea to compare average wages of renters vs homeowners as well, to see if its a fair comparison. The only fair comparison for a renter/homeowner is to look at the cost of owning vs cost of renting a specific home. You can try statistical generalisation but that does not accurately reflect most situations.
How many kids do you have? How much to you safe?
“600,000 Canadians have a HELOC with zero balance.”
…must be bears.
Three out of four people live outside of Toronto or Vancouver, the two cities that skew the national averages. In most other parts of the country, housing costs are more sane and $1074 is closer to the norm. So yes, national statistics do reflect “most situations.”
I disagree, it would be difficult to buy a house for $225,000 in any major Canadian city, including Halifax and St.John’s.
…they’re not angry renters, that’s for sure.