Where is it cheaper to rent vs. buy in Canada?

A new report reveals where it is cheaper to rent rather than buy a home in Canada.

Many Canadians struggle with cost of living increases and unemployment. A recent report found GTA residents must make at least $26 an hour to live comfortably. This makes finding the best deal on housing all the more important.

Home prices and rents have dropped in the GTA in recent months. The average home selling price declined 1.6 per cent in December compared with a year earlier to $1,067,186. Rents also dropped 3.2 per cent in 2024, reaching a 17-month low of $2,109.

But both rents and homes prices remain high, particularly in the GTA, after steep increases starting in early 2021.

Real estate brokerage Zoocasa analyzed the cost difference between renting and buying across 21 cities and regions in Canada and found renting is the more budget-friendly choice in most Canadian cities and regions.

They looked at average home prices for December 2024 and rental prices from the Canadian Real Estate Association and Rentals.ca using a combined average of one-bedroom and two-bedroom apartments. Monthly mortgage payments were calculated assuming a 25-year amortization, a 20 per cent down payment, and a five-year fixed rate of 4.04 per cent.

Housing costs remain the highest in the Vancouver area where someone renting a home pays an average of $3,031 monthly, while a comparable property would require a mortgage payment of $5,404.

Renters would save $2,373 or 44 per cent.

The GTA is not quite as extreme, the report found.

Toronto renters typically save $1,924 monthly, while Mississauga residents save $1,674.

People interested in buying a home without breaking the bank may find more economical choices outside of major cities.

Winnipeg, for example, has a $38 monthly difference between owning and renting. Saskatoon and Saint John follow similar patterns, with modest gaps of $225 and $363, respectively.

“These balanced markets often provide the best opportunities for potential homebuyers, as they can build equity without taking on significantly higher monthly costs,” Zoocasa said.

Zoocasa noted that saving on housing costs is only one part of the equation.

“When you purchase a home, you build equity over time and take on maintenance, property taxes, and insurance costs,” Zoocasa said in the report. “On the other hand, renting offers more flexibility and fewer obligations, but you won’t accumulate equity in the property.”

See the full report from Zoocasa here.