Residential Market Commentary - Renters retreat from the market

A key segment of Canada’s first-time homebuyer market appears to be delaying its purchasing plans.  A new survey by real estate giant Royal LePage suggests renters are holding back, waiting for further price declines.

The survey finds that 40% of renters, who considered buying before signing or renewing their current lease, are waiting for property prices to drop.  Another 29% are waiting for further interest rate reductions and 28% say they are continuing to rent while they save for a down payment.

The market has become more buyer friendly (prices are off their peaks, interest rates are down and supply is up) but affordability is a primary concern for renters.  Across Canada, 15% of tenants say they spend more than half of their net income on rent.  More than half of renters (53%) believe their income will not allow them to buy in their preferred neighbourhood.

Beyond the financial concerns, nearly a third of renters (31%) say they have no intention of buying.  Of that group, 40% say renting is more affordable, and another 40% simply do not want the responsibilities associated with homeownership.

At the same time rental costs, while still high, have been moderating.  One national analysis shows, average rent for a one-bedroom unit declined 3.6% year over year to $1,857 in May 2025.  Two-bedroom rents fell 4.6% to $2,225.

The survey suggests the desire for ownership remains strong with 54% of renters saying they intend to buy a home “in the future”.  Sixteen percent expect to make the move within the next two years, 21% are looking to buy in two to five years.