Canada Housing News, June 2024: Renters, Down Payments and Rates

As of June 2024, the surveys coming out of Canada told one story: close to one in three Canadians rent, 27% of those renters planned to buy within two years, and most of the rest were waiting for interest rates to fall before they started looking. Rates, not taste, were setting the pace.

I am Moe Asgarian, a Broker in Toronto with RE/MAX, ranked #47 in the company worldwide, and I read these reports in the same week my clients start asking me about them. Here is what the June 2024 surveys actually said about renters, down payments, where buyers were looking, why owners were selling, and where one former Bank of Canada governor thought rates were heading.

How many Canadians rent, and how many planned to buy

Close to one in three Canadians were renters as of June 2024, and the surveys suggested that share would keep growing if purchase prices stayed where they were. Among those renters, 27% said they planned to buy a home within the next two years. The answer moves a lot by age: in the 18 to 34 group, 40% said they intended to buy inside two years.

The other side of the same survey is the part most coverage skipped. Around 70% of renters had no immediate plan to buy at all, and half of them said their income was not enough for the home they actually wanted to live in. Analysts reading those answers warned that the rental side of the Canadian market will run short sooner or later. If people cannot become owners easily, more of them stay in the rental pool every year, and the result is a shortage of rental units.

What renters expected to put down

On down payments, the expectations as of June 2024 split three ways. Half of the renters who planned to buy within two years expected to put down less than 20%. About 26% thought they could manage 20%. Roughly 15% believed they could put down more than 20%.

The figure that stood out to me was family money: 25% of these would-be buyers expected to raise the down payment with help from relatives. That is a quarter of the next wave of first-time buyers whose timing depends on somebody else's balance sheet rather than their own savings rate.

Why 40% were looking more than 50 km from home

As of June 2024, 40% of these potential buyers said they were considering a home more than 50 kilometres away from the city they live in. The reason is not complicated. The further you go from the city, the cheaper the house. For a Toronto household priced out of the neighbourhood it rents in, distance is the one lever that still works without a bigger income or a bigger gift.

I say this to clients plainly: that trade is real, but it is a trade. Commute, schools, resale depth and how long a property takes to sell all change when you cross that line, and the savings on the purchase price are not free.

Rates were the trigger, not preference

A separate quarterly survey asked Canadians how interest rates were affecting their lives. As of June 2024, 65% said that lower rates would make them feel better off economically and would have a noticeable effect on their household finances. You could guess that answer, but seeing the number is useful.

The same work found that half of Canadians were waiting for the first drop in interest rates before they would even start looking for a home. That is why, in June 2024, I expected the second half of the year to be busier in freehold housing in particular, meaning townhouses, semi-detached and detached homes, and to open some new room for buyers and sellers both.

Why owners were selling: downsizing led the list

One more survey from that month asked owners why they were selling. The answers came down to three reasons: to buy a smaller home, to buy a bigger one, or to change neighbourhood. As of June 2024, the largest group wanted to go smaller.

The reason behind that is the cost of ownership. Carrying a home had become expensive, and moving down was how those owners planned to cut their day to day costs. Analysts noted that the rate reduction that had happened by then would gradually make the financial picture easier for owners, which is a slow effect rather than a rescue.

David Dodge on a 3% policy rate by 2026

The news I could not skip in June 2024 came from David Dodge, the former governor of the Bank of Canada. He predicted the policy interest rate would reach roughly 3% by 2026. His reasoning was that inflation would be near 2% by 2026 and that the Bank would therefore keep lowering rates gradually.

Two things matter about that forecast. It was his opinion, not a schedule, and plenty can happen between mid-2024 and 2026. He also framed 3% as the limit rather than a waypoint: he did not expect the rate to go below it. He is one of the senior financial voices in Canada and follows the country's financial markets closely, so the call deserved attention without being treated as a promise.

If you are deciding whether to buy, sell or keep renting in Toronto, fill out the form at the bottom of this page or book a free consultation, and we can look at your own numbers instead of the averages. Stay well and take care.