Some Ontario renters are reducing spending on food and groceries to make ends meet: report

A rooftop terrace of a condo building is seen in downtown Toronto on Thursday, May 25, 2023. THE CANADIAN PRESS/Chris Young

A significant portion of renters in Ontario are cutting back on things like food and groceries to afford their living situation, a new report suggests.

The sacrifices are detailed in Royal LePage’s 2025 Canadian renters report, which was conducted by Burson earlier this month and heard from 1,854 respondents nationally.

According to the report, 39 per cent of Ontario renters are reducing their food and grocery costs to make ends meet. Another 22 per cent are taking on credit card debt and 21 per cent have taken on a second job or side hustle.

Moreover, the survey found that 38 per cent of those leasing a property in Ontario are spending between 31 and 50 per cent of their net income on monthly rent costs. At least 15 per cent of respondents are spending more than 50 per cent of their income on rent, the report showed.

The revelations come as the data suggests rent prices in Toronto are dropping, albeit remaining “well above” historical averages.

Citing the latest national rent report by Rentals.ca and Urbanation Inc., Royal LePage says the average price of a one-bedroom rental unit in Toronto decreased by 7.1 per cent year-over-year to $2,302 in May. Meanwhile, the average price of a two-bedroom decreased by 10.7 per cent year-over-year to $2,933.

The real estate company says the drop in rental prices is due to a softening in the market, which it attributes to two factors.

“A surge in supply, driven by the completion of thousands of new condo units, has added to inventory in recent months. At the same time, reductions in international student visas and the issuance of work permits have hampered activity, leading to fewer multiple-offer scenarios on rental units – something that had become typical for in-demand properties, especially during the peak of the pandemic rental surge in the second half of 2022 and 2023," Amrit Walia, sales representative with Royal LePage Signature Realty in Toronto, said in news release.

Walia said that activity in the rental market has “picked up” in certain pockets of the city, specifically in the financial district and surrounding areas as some downtown companies do away with remote work. He said one-bedroom units with dens, particularly those near restaurants, green spaces and the “vibrancy of downtown life” remain in high demand.

More than half of Ontario renters plan to purchase property in the future

Despite the “challenges with affordability,” as described by Royal LePage, the company says that 55 per cent of renters surveyed in Ontario say they plan to purchase a property in the future.

Of those respondents, most say they plan to buy between two and five years or in more than five years from now.

But Phil Soper, president and CEO of Royal LePage said that could be a mistake.

“If you look over the past 75 years, home prices have appreciated about five per cent per year,” he told CP24 Thursday morning. “So, waiting at any time in Canadian history for the value of property to drop is challenging.”

“I think, the advice I always give is, find the right time for your family to move in, and don’t try to time the market as if it was a stock on the TSX,” he said, adding that “all the economic fundamentals” are pointing towards a coming “return to normalcy.”

Earlier this month, the Toronto Regional Real Estate Board said the average selling price in the city decreased four per cent compared with a year earlier to $1,120,879, and the composite benchmark price, meant to represent the typical home, was down 4.5 per cent year-over-year.

“It’s been a really strange period of about 36 months where affordability has improved, but there’s a turning point, and it’s going to happen this summer or this fall,” he said.

At least 28 per cent of the Ontario renters surveyed said they considered buying a property, rather than renting, before they signed or renewed their current lease. When those respondents were asked what factors influenced their decision to rent instead of buy, 43 per cent said they were waiting for prices to drop and 34 per cent said they either couldn’t qualify for a mortgage or were waiting for further interest rate cuts.

Half of all Ontario renters said their income will not allow them to buy a property in the neighbourhood they want to live in.

With files from The Canadian Press