Around 800,000 households across Canada set aside more than 50% of their incomes on rental fees, a recent analysis by the BC Non-Profit Housing Association has found.
Overspending has increasingly become a feature in the Canadian housing market rather than a bug, with the advent of easy credit. Approximately 1.8 million households nationwide are also dedicating more than 30% of their incomes on housing expenses.
“Paying too much for rent has become the new normal,” association CEO Jill Atkey said in an interview with Global News. “That takes a real toll on health, on time and quality of life.”
Additional data from the Credit Counselling Society indicated that this spending is a major driver of anxiety, especially considering the pressures of inflation and rising costs of living.
One out of three Canadians admitted that their debt loads have increased since last year, and that they are spending more than their net income. Fully 43% are forced to live paycheque to paycheque, while 83% indicated anxiety over growing daily living costs.
“Canadians continue to rely on their credit cards or lines of credit to supplement costs of living,” CCS president Scott Hannah said. “If the economy continues to slow amidst trade tensions and other factors, Canadians need to prepare now for a potential recession in the future.”
During Q2 2019, Canada’s average household debt ratio dropped to 177.1% of disposable income, slightly lower than the previous quarter’s reading of 177.6%. Canadians are also shouldering a debt load of an average of $30,000 each – far above the $12,000 level just 20 years ago.