This is a signal that wealth accumulation is going to be more difficult in Canada.
Perhaps the most potent wealth building tool in the arsenal of the average family is owning a home. Over a few decades, they pay off a mortgage and, generally, the value of the property appreciates so there is a compound effect with less debt on a more valuable piece of real estate.
But there is a troubling sign in this country — more people are becoming renters and fewer are owners.
A new report from RBC Royal Bank is focused on this development. It shows the number of renters has grown three-times faster than the number of owners in the past decade. It doesn’t seem to matter whether you’re young or old, in a big community or a small one, although it becoming more prevalent among younger residents of larger urban communities.
Affordability is a key element of this story but interest rates are not the only factor. This trend was evident before rates started to rise so there is something more foundational at play here.
