Canada’s Delayed Parenthood: The Impact of High Rent on Young Families
Many Canadians in their 20s and 30s are delaying having kids, with high rent cited as a significant factor. A recent study found that 55% of Canadians aged 18 to 34 said the housing crisis affected their decision to start a family. This trend reflects a broader issue that intertwines economic pressures and personal life decisions in contemporary Canada.
Anna Smith, a 27-year-old graduate student at the University of Toronto, is among those affected. She and her partner live in a 500-square-foot apartment in Toronto’s east end for $1,550 per month. Smith dreams of starting a family but feels confined by their small living space. Delaying having children for two years, she describes the situation as “just heartbreaking,” expressing a deep longing to be a young parent, unlike her own parents who had her in their mid-40s. Smith’s situation is not unique but highlights the emotional and practical struggles faced by many young Canadians.
The rental housing crisis in Canada is severe. Demand outstrips supply, and vacancy rates have hit new lows while rents soar to unprecedented heights. A report from the Canada Mortgage and Housing Corporation notes that less than one per cent of rentals are both vacant and affordable for the majority of Canadians. This scarcity is particularly dire for those seeking larger apartments with multiple bedrooms, with only 14,000 units meeting affordability criteria for the median income of families.
Many families are crammed into smaller apartments, with parents making significant sacrifices, such as sleeping on couches so their children can have bedrooms. Others, like Smith, are delaying starting families altogether. The high cost of living means more Canadians are putting parenthood on pause, reshaping their dreams of family life.
Zach Robichaud, a 37-year-old from Kitchener, Ontario, grew up in a large family and wanted the same for his daughter. However, he and his wife, despite both having full-time jobs, find most of their income consumed by their $2,000-a-month rent. The cost of living has forced them to reconsider having more children, leading to a sense of sadness and loss for the future support system they hoped to provide for their daughter.
Statistics Canada’s report in January 2024 revealed that Canada’s total fertility rate dropped to its lowest point in over a century, at 1.33 children per woman. Financial constraints were a major factor, with 38% of young adults aged 20 to 29 believing they could not afford to have a child in the next three years. This decline in fertility is linked directly to the broader economic conditions and housing affordability issues young Canadians face.
The issue is compounded as older Canadians stay in their homes longer, reducing the available housing stock. According to Randall Bartlett, a senior director of Canadian economics with Desjardins, increasing the housing supply is essential to making housing and rents more accessible for a broader group of Canadians.
The Abacus Data and Canadian Real Estate Association study from late 2023 found that 28% of young adults who wanted children were postponing due to housing affordability, and 27% chose to have no or fewer children for the same reason. This study underscores the significant impact of economic conditions on personal life choices.
Karen Lawson, a professor of psychology and health studies at the University of Saskatchewan, highlights the repercussions of delayed parenthood. People who delay having children outside their prime reproductive years may have fewer children than desired or face fertility problems, resulting in involuntary childlessness. Lawson suggests that a more “parallel” life path model, where young people can achieve education, career, and family goals simultaneously, may be necessary to support these aspirations.
Smith’s situation epitomizes the struggles of many young Canadians. Finishing her PhD in medicine, she and her partner found their current affordable apartment during a brief dip in prices but now face the daunting prospect of paying over twice as much for a larger space. This reality forces them to continuously lower their expectations for their future, reflecting a widespread feeling of frustration and helplessness among young Canadians.
Robichaud’s disappointment is palpable as he and his wife, despite their decent incomes, feel they cannot afford another child. His statement, “I have never made more money in my life and I’ve never been poorer,” resonates with many Canadians facing similar economic challenges.
As we delve into these personal stories and statistics, we must ask ourselves: What can be done to address the housing crisis and support young Canadians in achieving their dreams of starting a family? How can we create a more balanced and equitable society where economic pressures do not dictate such deeply personal decisions?
Torontonians on the Move: Why More Residents are Leaving the City
People are leaving Toronto in serious numbers. New data released by Statistics Canada in May shows that every census metropolitan area in Ontario lost more residents to other provinces than it attracted between July 1, 2022, and June 30, 2023. Toronto, in particular, experienced the largest net inter-provincial migration deficit recorded among Canadian cities, with 16,092 more residents moving out than moving in. Additionally, within Ontario, Toronto saw a net migration loss of 93,024 residents.
According to Statistics Canada’s domestic migration data, in the past two years, 220,000 more Canadians have left Toronto than have arrived. Most of these individuals relocated to other areas within Ontario, such as Oshawa, Hamilton, the Niagara Region, or London. Others moved to cities in other provinces, including Calgary, Edmonton, and Halifax. This trend of migration points to significant shifts in population dynamics and raises questions about the factors driving these moves.
One of the top factors influencing Torontonians to leave is the cost of housing. A recent survey by Royal LePage revealed that 51 percent of respondents would consider buying property in one of Canada’s more affordable cities if they could find a job or work remotely. The most popular relocation choices for those in the Greater Toronto Area are Edmonton, with 19 percent of respondents considering it, followed by Thunder Bay at 15 percent, and St. John’s at 14 percent.
In recent years, Alberta has become a haven for Torontonians seeking lower costs of living, job opportunities, and affordable housing. In 2022 alone, 39,451 residents from Ontario moved to Alberta, drawn by the province’s “Alberta is Calling” campaign. This initiative includes a $5,000 bonus for eligible skilled tradespeople to help offset moving costs, making the prospect of relocating even more appealing.
The economic contrast between Toronto and other cities is stark. In May, the average selling price of a home in Toronto decreased by 3.5 percent year-over-year to $1,117,400. Meanwhile, Edmonton saw a 6.1 percent increase in the average selling price of a home, reaching $392,700, which is still significantly more affordable compared to Toronto. This price difference plays a crucial role in the migration patterns observed.
The reaction to the news about the exodus from Toronto has been mixed, particularly on social media platforms like X. Some users have called Toronto “overrated,” while others reflect on how prohibitively expensive the city has become. These sentiments underscore a growing discontent with the high cost of living in Toronto and a desire for a more affordable and sustainable lifestyle elsewhere.
The implications of this migration trend are profound. As more residents leave Toronto, the city faces potential challenges in maintaining its economic vibrancy and cultural diversity. Moreover, the influx of former Torontonians into other cities could influence those local economies and housing markets in unexpected ways.
In light of these developments, one must ponder the broader implications: How will Toronto adapt to the loss of so many residents, and what strategies can be implemented to make the city more affordable and attractive for current and future inhabitants? As more people weigh their options and consider relocating, the future of Toronto and its demographic landscape remains uncertain. What steps should be taken to ensure that the city remains a viable and appealing place to live?
Toronto Home Sales Rise, But Buyers Are Taking Their Time
In June, Toronto saw a 4.2 percent rise in home sales after four consecutive months of decline. This increase, however, occurred in a market where activity remained relatively slow due to a surge in new home listings, giving prospective buyers an abundance of options and reducing the urgency to purchase immediately.
The Toronto Regional Real Estate Board’s monthly report revealed that there were 5,406 sales in June after seasonal adjustments. Although this was an improvement from May, it still represented a 12.6 percent decrease compared to June of the previous year. The early June interest-rate cut was expected to bring more buyers into the market. Yet, the influx of new listings meant that competition among buyers was less fierce, leading to a more cautious approach.
Realtor Josie Stern from Sutton Group-Associates Realty Inc., who has over three decades of experience in the Toronto market, observed that buyers are feeling a sense of choice and lack of urgency. With an increase in inventory, they “feel emboldened” and do not feel pressured to buy immediately.
Data from the Toronto Regional Real Estate Board indicated that the number of new listings rose by 9.3 percent from May to June on a seasonally adjusted basis. This was the steepest increase since September of the previous year when sales began to slow following unexpected interest-rate hikes by the Bank of Canada. By the end of June, there were 23,613 active listings, marking the highest volume since 2010.
Toronto’s luxury real estate market, in particular, experienced a form of gridlock. Despite potential interest-rate cuts, realtors remain uncertain about their impact on buyer motivation, given the current high inventory levels. TRREB president Jennifer Pearce noted that the June sales figures suggest that significant homebuyer movement would require multiple rate cuts. According to a board-sponsored poll, cumulative rate cuts of at least 100 basis points would be necessary to significantly boost home sales.
The cost of borrowing remains relatively high, with the interest rate on a typical five-year fixed mortgage still above 5 percent. This has made it challenging for prospective homebuyers to qualify for sufficiently large mortgages, particularly in the Toronto region, one of Canada’s most expensive real estate markets.
The home price index, which excludes the most expensive properties, stood at $1,092,100 last month. This represented a slight increase of 0.4 percent from May but a 4.8 percent decrease from June of the previous year. Home prices experienced the most significant declines in the regions to the west of Toronto, with Halton and Peel seeing year-over-year drops of 5 percent and 6 percent, respectively.
As the central bank prepares for its next rate announcement at the end of July, the real estate market in Toronto remains in a state of flux. The combination of high borrowing costs and an abundance of housing options is causing buyers to proceed with caution. The situation raises important questions about the future of the market and the factors that will ultimately drive buyer behavior.
Given these dynamics, one must ponder: What measures can be taken to balance the real estate market in Toronto and ensure it remains accessible and appealing to prospective homebuyers? How will the interplay of interest rates, housing inventory, and economic conditions shape the future of homeownership in one of Canada’s most vital urban centers?
-The TanTeam Editorial
