Hidden costs: How short‑term rentals drive up rent in Canadian cities

The study explored how much of their annual income renters need to spend on housing. In Quebec City, residents spend only 21.65 per cent of their income on rent, the lowest in the country. The average monthly rent for a one-bedroom apartment in the city is $911, while the average annual income is $50,500. This figure is nearly 13 per cent lower than the national average, where Canadians typically spend 34.5 per cent of their income on rent.

Montreal and St. John’s followed closely as the second and third most affordable cities. In Montreal, the average rent for a one-bedroom unit is $960, and with an average annual income of $43,800, renters allocate 26.3 per cent of their income to housing. St. John’s renters pay $904 per month on average, which amounts to 27.74 per cent of the city’s typical $39,100 annual income.

Other cities where rent accounted for less than 30 per cent of residents’ income included Regina, Windsor, Edmonton, and Moncton. These cities are seen as more manageable for those seeking affordable housing while saving for a home.

At the other end of the spectrum, Toronto stood out as the least affordable city for renters in Canada. Residents spend 48.55 per cent of their annual income on rent. The average monthly cost of a one-bedroom apartment is $1,691, while the city’s average annual income is $41,800. Vancouver was not far behind, with residents spending 46.07 per cent of their $44,200 annual income on rent, based on an average one-bedroom price of $1,697 per month.

Halifax ranked third among cities with the highest rent-to-income ratios. Renters in Halifax spend 40.99 per cent of their average annual income of $38,700 on one-bedroom units, which cost $1,322 monthly on average.

The study also identified the impact of short-term rental platforms like Airbnb in worsening rental affordability in major cities such as Toronto and Vancouver. With landlords increasingly prioritizing short-term leases that bring in higher profits, the supply of long-term rental units has diminished. This trend has contributed to rising rent prices and heightened competition in already strained housing markets.

The data collected ranked cities by the proportion of income spent on rent and included a breakdown of the affordability gap. Cities such as Quebec City and Montreal proved to be viable options for renters trying to save for homeownership. By contrast, Toronto and Vancouver presented a much more difficult landscape for renters, with the bulk of their income consumed by housing costs.

Kris Bruynson, vice president of marketing and product at Money.ca, commented on the findings, noting that renters in high-cost cities must carefully weigh their choices. “Although Vancouver and Toronto are appealing, everyone must weigh the cost versus savings when renting in these expensive cities. Is it worth spending 49 per cent of your income on rent?”

The report from Money.ca aims to provide insights into the challenges renters face across Canada’s housing markets and serves as a resource for those considering relocation in pursuit of more affordable housing. It highlights the need for individuals to balance their housing costs with their broader financial goals, especially in cities where rising rents are outpacing income growth.

The full analysis is available through Money.ca, with additional details on rental affordability and its implications for renters in Canada.