While mortgage payments may seem like the most significant financial stress for Canadian homeowners, they struggle more to afford daily essentials like groceries.
That’s according to data released in June from the Angus Reid Forum, in partnership with Toronto-based mortgage lender Bloom Finance.
In its survey, a significant number (42%) of Canadian homeowners said day-to-day essentials like groceries and gas are the main financial struggle they are dealing with, followed by unexpected expenses (20%) and mortgage payments (11%).
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When the data was broken down by province, it found that Quebec homeowners have the most difficulty keeping up with unexpected expenses (25%) compared to the national average of 20%.
Meanwhile, residents in Alberta (51%) and Manitoba (50%) reported experiencing the most difficulty with the cost of gas and groceries compared to other provinces.
Gen X homeowners in Canada are impacted more by day-to-day unaffordability, as 46% of respondents over 55 said they were grappling with the high cost of groceries and gas, compared to those 18 to 34 (41%) and respondents aged 34 to 54 (39%).
For years, homeownership has seemed less likely for most Canadians. It’s still difficult, even though the Bank of Canada is steadily cutting its interest rates.
In June, the Bank of Canada dropped the interest rate from a longstanding 5% to 4.75%. That move was the first in more than four years, following six rate holds. Another quarter-point cut followed in July, bringing the rate to 4.5%. Then, in September, the BoC cut the key interest rate to 4.25%.
CIBC economists and other industry experts expect a quarter-point cut in October.
In its Economics Forecast report published on September 12, CIBC predicts that something more aggressive will occur within less than five months — two half-point cuts in December and January.
If things go as predicted, we could see the rate drop to 3% in January.
With files from Daily Hive’s Imaan Sheikh
This article was first published on June 25, 2024. It has since been updated.