Over half of Ontario renters want to buy homes soon, but affordability continues to hold them back: report

Affording a home in Ontario now means giving up more than just luxuries, as a new report says many residents are now cutting back on savings, retirement plans and even food to afford rent. 

The report, published on Thursday by real estate listings website Royal LePage, revealed that among 55 per cent of Ontarians who wish to stop renting and buy a property, 15 per cent are looking to do so within the next two years and 21 per cent in the next two to five years. Twenty-eight per cent have also considered buying a home before signing their current rental agreement. 

Nonetheless, according to the Toronto Region Real Estate Board (TRREB), even though prices are cheaper, home sales in the GTA are still significantly down from last year. 

Last month, 6,244 homes were sold in the region, a 13.3-per cent drop from May 2024, when 7,206 homes were sold at this time. Meanwhile, the number of available listings has gone up by 14 per cent, and prices have dropped by four per cent from an average of $1,120,879 to $1,167,646. 

According to TRREB’s Chief Information Office Jason Mercer, the issue lies in a trend of lack of economic confidence in light of the U.S. tariffs on Canadian goods that have been affecting markets and interest rates across the country. 

“Average selling prices are lower, and so too are borrowing costs. All else being equal, sales should be up relative to 2024. The issue is a lack of economic confidence. Once households are convinced that trade stability with the United States will be established and/or real options to mitigate our reliance on the United States exist, home sales will pick up. Further cuts in borrowing costs would also be welcome news to homebuyers,” Mercer said in a June 4 statement.

ONTARIANS STRUGGLING TO AFFORD HOUSING

Amid this economic uncertainty, today’s Royal LePage report also revealed that 43 per cent of Ontario renters have chosen to wait for price drops before deciding to purchase a home, while 34 per cent are hoping for an interest rate decline. 

However, 34 per cent of respondents said that while they have already decided to purchase a home, they couldn’t qualify for financing or mortgage. 

Out of the 31 per cent of respondents who said they are not planning on buying a home, 50 per cent say their income is not enough to cover mortgage repayments in their desired neighbourhood and 43 per cent believe that it’s still more affordable to rent in the province. Another 43 per cent also said they don’t want to take on the responsibility of maintaining a property.

And it’s not only homebuyers that are struggling to make ends meet, as many Ontarians are also struggling to pay rent in the province.

The report revealed that 53 per cent of Ontario tenants have been spending more than 30 per cent of their paycheques on rent alone, with 38 per cent spending up to 50 per cent of their monthly income in rental costs, and 15 per cent spending even more than that. 

At the same time, 39 per cent have been reducing groceries and food expenses and 32 per cent have been allocating less money into savings or retirement contributions, while 22 per cent have also accumulated credit card debt. 

TORONTO TO SEE SOFTER MARKET, BUT NOT FOR LONG

Royal LePage Sales Representative Amrit Walia points out that demand for housing in Toronto has seen a slight decline, while thousands of new condo units are available in the city, which should give tenants more room to negotiate rent or upgrade their housing in the near future.

“We anticipate modest price growth in the short-term, presenting a favourable window for renters looking to upgrade their living space. However, though the competitiveness of the rental market has eased, prospective renters shouldn’t let their guard down. Even in a slower market, landlords remain selective, prioritizing reliable tenants and consistent income,” she said in an email statement. 

Meanwhile, as more companies are mandating a return to in-person work, Walia says that demand for rentals, especially in Toronto’s Financial District, are also increasing, which could drive supply down again.

“Softer market conditions are unlikely to last. With builders scaling back construction activity, the influx of new supply is expected to taper off significantly in 2027 and 2028, setting the stage for renewed demand and upward pressure on prices once again,” she added.