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Written By
Corinna Frattini
Jan 16, 2026
•Housing Affordability
Rental affordability in Canada means being able to pay rent and cover other essential housing costs without financial stress. Many newcomers struggle to find affordable rent that meets their household needs, especially when using the 30% income rule. Understanding housing affordability in Canada helps renters strike a balance between housing costs, location, household needs, and long-term stability.
Canada Mortgage and Housing Corporation (CMHC) uses the 30% income rule to measure housing affordability. However, the rule does not reflect the reality that many renters, especially newcomers, face.
For newcomers, housing affordability in Canada often means making short-term trade-offs for long-term stability, rather than hitting a specific percentage.
These factors explain why rent may feel unaffordable and what you can realistically control.
The 30% rule suggests rent should not exceed 30% of your gross household income.
Gross Household Income Definition (CMHC): The combined earnings of everyone living in a single home, before taxes are deducted.
Use this table to estimate what you can comfortably pay for housing while covering other essential costs.
| HOUSEHOLD INCOME | 30% BUDGET FOR HOUSING | MONTHLY RENT BUDGET |
|---|---|---|
| $50,000 | $15,000 | $1,250 |
| $60,000 | $18,000 | $1,500 |
| $70,000 | $21,000 | $1,750 |
| $80,000 | $24,000 | $2,000 |
| $90,000 | $27,000 | $2,250 |
| $100,000 | $30,000 | $2,500 |
đź’ˇ Tip: Adjust these numbers for utilities, transportation, and family size to understand your true rental affordability.
Where you rent matters as much as how much you earn. Rental prices vary across Canada, influenced by demand, housing supply, and population growth.
Key factors shaping affordability:
Newcomer reality: Many settle in Toronto, Vancouver, or Calgary for jobs, but these cities have higher rent and more competition. Smaller or mid-sized cities may offer more affordable options, but you must balance this against job opportunities, transit access, and lifestyle.
Solution: Compare first-year affordability versus long-term opportunity, and review city guides or neighbourhood breakdowns before committing.
Vacancy rates measure the percentage of rental units in a market and influence prices.
| VACANCY RATE | MARKET CONDITION | WHAT IT MEANS FOR RENTERS |
|---|---|---|
| Below 3% | Tight / Competitive | Few units available, higher rents, more competition, requires faster applications. |
| Around 3% | Balanced | Supply roughly meets demand, moderate choice and stable prices. |
| Above 3% | Renter-friendly | Plenty of units, and renters can negotiate better terms and rental incentives. |
đź’ˇNewcomer tip: If vacancy is below 3%, act fast and budget for higher rent. Or, consider smaller units, different neighbourhoods, or apartments that include utilities.
Learn more in How to Save Money on Rent in Canada: 10 Tips for Newcomers.
Example: A $2,000/month apartment without utilities and transit access could end up costing $2,400+/month when you add expenses.
đź’ˇNewcomer tip: Always confirm average monthly costs with the landlord to understand the true price of living in a unit.
Larger households may require more bedrooms or workspace, which can increase rent but improve long-term stability.
đź’ˇNewcomer tip: In some cases, a two-bedroom apartment can be a smart choice for newcomers over a one-bedroom. Over time, it can reduce costs by avoiding a future move or overcrowding.
Learn more about how to choose an apartment for your family
Housing affordability includes commuting costs. Consider:
Trade-offs renters face:
đź’ˇNewcomer tip: A cheaper apartment may not be more affordable if transportation costs offset savings. Include car, insurance, and transit fees in your budget.
Even if rent is technically affordable, newcomers may face barriers to renting.
Common barriers:
Solutions for Newcomers:
💡Tip: Price affordability ≠access. Plan to overcome application hurdles and secure a unit that meets your needs. Learn more: Can You Rent in Canada without a Credit History?
Unlock the Secrets to Crafting a Winning Rental Application. Are you a newcomer to Canada searching for your perfect rental home? Look no further! Our comprehensive guide will help you navigate the rental application process confidently and successfully!
GET FREE GUIDEAffordable rent today may become unaffordable tomorrow. Consider:
Provincial rent control regulations
Newcomer Tips:
Typically, spending less than 30% of gross household income on housing. Many renters exceed this due to market conditions.
Yes. Cities with low vacancy rates and high demand generally have higher rents and more competition.
Options include guarantors, references, and newcomer-friendly landlords. Read more in our guide, Can You Rent in Canada Without a Credit History?
True affordability includes rent plus utilities, transportation, and basic housing-related costs.
Often yes, but consider employment opportunities, transit access, and long-term growth.
🏠Next Step: Find rentals that fit your budget and household needs? Explore Rentals for Newcomers to see available options across Canada!
WRITTEN BY
Corinna Frattini
Senior Editor and Content Director, Prepare for Canada
Corinna researches and writes content to help newcomers make informed decisions about housing, employment, banking, and aspects of settling in Canada. With a background in human resources and leadership development, her articles focus on how newcomers can continue their careers in Canada. Her writing combines research, practical guidance, and clear language to support newcomers on their journey.
© Prepare for Canada 2026
How to Save Money on Rent in Canada: 10 Tips for Newcomers
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