High bids, high rent holding back first time home buyers

It's even harder for Windsorites to make the transitionfrom renting to buying.

The new Rental Market Report by the Canada Mortgage and Housing Corporation (CMHC) said the average cost of rent in Windsor has gone up by 5.9 per cent since 2020.

"Demand is significantly greater than supply and sowe have a very tight housing market," said Tad Mangwengwende, CMHC's senior analyst of economics.

The cost of buying a home in Windsor has gone up by 30 per cent since 2020. Somore residents are forced to stay in the rental market for longer, and it's adding more pressure on an already compressedrental housing supply, he said.

"A lot of potential homeowners have wanted to move out of the rental space into the home ownership space. Butlooking at the increase in the house prices, many of those potential homeowners have remained in the rental market, so it's even squeezed the supply even more."

Saving for a down payment 'nearly impossible' for this first time home buyer

3 years ago

Duration 0:53

Five years ago, Burke Moras decided move back in with his parents to save for a down payment on his first home -- but it hasn't been enough.

This has led some people like Burke Moras to improvise. He decided five years ago to move in with his parents to save money on rent and more proactively save for a down payment. But he said it's likely not enough.

"Every time I reach my savings goals, I need more to make my down payment. It's a runaway market and I do what I can to keep my focus."

He said it's hard to say how much money he will need to have saved tobid on his first home.

"The numbers just fluctuate so wildly every month, so it's hard to predict where the market will be by that time. If I say I need $20,000 more -- and it might take me years to save up to that, maybe longer than that. I am aiming to have $50,000 within the next five years, but I don't know if I will make that."

Burke said he's finding it hard to compete in the local housing market even while saving on rent and working a full-time job in the trades.

For others like Matt Hebert, the dream to buy a home feels completelyout of reach.

"Before I realised how bad the market was... I thoughtI'm going to save up a ton of money for a place. But now, the last few years have set in and I thought maybe realistically, I'll just rent for my whole life."

Hebert is currently in school and lives with his parents to save money on rent. He said his parents are thinking of selling their family home to help him with the high cost of rent.

"I wanted to save for a nice house but I might just rent forever because I don't know if it's ever going to be obtainable or smart to buy a house that is $200,000 or so above what it's worth."

Looser COVID restrictions expected to increase demand for rentals

The CMHC Rental Market report found thenumber of units being rented out in Windsor has increased by 245 units or by 1.6 per cent since 2020. It noted that is the largest annual supply increase seen in Windsor in more than 10 years.

But despite that increase in rental units, the availability of vacant units since 2020 has stayed relatively steady at 3.5 per cent because of a rapid increase in demand.

Mangwengwendesaid on top of that, even more demand is expected to come once COVID restrictions loosen up.

"We haven't had people travelling...[fewer]temporary foreign workers andstudents fromthe University of Windsor. All these things have dampened the demand side of the story. And yet, even with these record increases on the supply, vacancies are flat."

According to the report, less than half of all vacancies in 2021 were affordable, even formid-income renters with a yearly income of $48,000.