Montreal real estate: New portrait of Montreal renters reveals half live alone
Montreal is a city of renters. Despite being a comparably more affordable place to buy when compared with Vancouver or Toronto, home ownership rates are the lowest in Canada. Almost half of Greater Montreal households rent, and the number rises to almost two-thirds if you don’t include off-Island suburbs. The big question is, why?
A new profile of Montreal renters released this month by the Canadian Mortgage and Housing Corporation (CMHC) suggests the answer may be a simple one: The majority of Montrealers who rent don’t have a choice. They can’t afford to buy.
After a deep dive into data on household characteristics from the 2016 Census, CMHC economist Francis Cortellino found 60 per cent of Montreal renter households earned less than $50,000 per year, while about a third made less than $30,000 per year.
One-third of households in Montreal are people living alone. Yet half of renters and almost as many condo owners nest solo. When Cortellino compared the characteristics of singletons who bought condos to those who rented, he found the groups were demographically similar except for one important factor: income.
The median income of single Montrealers who bought condos was about double that of those who rented. The smallest income gap between renters and homebuyers was in Vaudreuil-Soulanges, where the median income of homeowners was 68 per cent higher than households who rented. The biggest disparity was in St-Jean-sur-Richelieu, where homeowners earned 157 per cent more.
Only five to eight per cent of renters in most sectors of Montreal had household incomes topping $100,000. There were some exceptions; in areas with higher rent like Griffintown, Outremont and Nuns’ Island, as many as a quarter of renters earned six-figure incomes.
Cortellino’s analysis revealed another big difference between renters and homeowners: mobility.
Homebuyers are often willing to move to lower-priced suburbs to find a property they can afford, but it turns out low-income renters were much less likely to move to another sector in a quest for cheaper rent.
“Lower income households who rent actually move less often than more affluent households and they tend to move within the sector where they already live,” Cortellino said. “We don’t generally see renters moving from the city to the suburbs.”
Cortellino speculated that the costs of moving were a greater burden on lower-income households, and that the extra time and money spent on transportation could outweigh the advantages of moving outside the city in search of lower rent.
The range in rent also tends to vary less from sector to sector than the range in home prices, he said. Average monthly rents for one-bedroom apartments in 2018, for example, ranged from $600 to $720 depending on location. Monthly mortgage payments to buy a condominium in those same sectors, on the other hand, varied between $1,000 and $1,800.
Cortellino found there was one area that didn’t quite fit the pattern, however: Vaudreuil-Soulanges.
For renters in car-centric West Island neighbourhoods with expensive rents, who are already driving to work, moving across the bridge to Vaudreuil can bring savings substantial enough to justify the extra drive time, Cortellino said.
“We don’t see a lot of low-income renters going to the North Shore or South Shore, but we do see more low-income households leaving the West Island to live in Vaudreuil-Soulanges,” he said.