Why People are Turning to Rentals

Despite steadily rising home prices and brutal seller’s markets in some areas, Canada's homeownership rate has been inching back up from its 2016 lows, reaching 64.2% in January. That leaves more than a third of Canadian households renting their homes or selling them and downsizing to a rental apartment.

Many renters are quite content living lease to lease especially after the foreclosure crisis laid bare the fact that owning a home isn’t for everyone and can sometimes cause more financial problems than it solves. But according to stats Canada the top reasons for renting suggest that the choice is sometimes rooted more in financial reality than lifestyle preferences. 

Reason No. 1: Don’t Have the Money to Buy
More than half (56%) of those who said they prefer renting to buying said they lack the funds to buy a home. Whether this means they haven’t been able to save up a down payment or can’t afford a mortgage, we don’t know.
It could very well be both: Home prices rose 37% between 2012 and 2017, while more and more potential buyers are weighed down by student loan debt and struggling to save a down payment. And as mortgage interest rates creep upward, it’ll only get more expensive to buy the exact same house. 
 
Reason No. 2: (Financial) Commitment Issues
About a quarter of those renters said they don’t want to be financially committed. This is perhaps the most healthy reason to keep renting. One of the biggest benefits to renting a home versus buying one  from a financial standpoint, anyway  is the flexibility it affords: If you’re offered a dream job on the other side of the country or even the world, you’re pretty much free to take it.

Reason No. 3: Bad Credit
Good credit is crucial if you want to qualify for a mortgage. So it’s no wonder about one in five respondents (22%) said the reason they rent is because of bad credit. Somewhat surprisingly, Generation X actually led the pack here, with 29% saying credit issues were holding them back, versus only 19% of millennials.

Reason No. 4: Don’t Want to Deal With Maintenance
This is another very good reason to keep renting the cost and burden of home upkeep can be staggering and exhausting. About half (51%) of respondents said they’d rather rent so they don’t have to deal with maintenance issues, but don’t assume that’s because millennials are afraid of “adulting” only 30% of millennials cited this as a reason they prefer renting. Meanwhile and quite understandably 71% of those over age 55 value the maintenance free rental lifestyle. 

Tell us: If you’re a renter here in Edmonton, is it out of choice or necessity?

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