Millennial renters will need 50% more in savings to retire than millennial homeowners

The latest report shows that millennials who rent all their lives will have to save much more for their retirement than millennials who have their own property.

According to the 2023 Mercer Retirement Readiness Barometer, Canadian millennials of 27-42 years old need to save 50% more if they rent than millennials who own their home.

To have a “reasonable income in retirement”, a millennial renter would have to save eight times their salary if they want to retire at the age of 68.

Meanwhile, the same millennial with their own home would only need to save 5.25 times their salary.

“Retired homeowners don’t have to pay as much for it,” – the report says.

“Homeownership also provides certain flexibility, as retirees who decide to downsize may have an access to a significant amount of money, while renters have to pay rent every month or deal with eviction, no matter how old they are.”

Rentals.ca and Urbanation’s report shows that average rents in Canada rose by 1% in March compared to February marking the first monthly gain since November.

The rent growth rebounded in spring following a short-term winter relief, leading the average rent to $2,004 in March.

As a result, the total annual increase reaches 10.8%.

According to the report, asking rents for purpose-built and condo apartments were up by 1.5% from February and by 10.9% from March 2022, stopping at $1,937.

The average asking rents were up by $196 on a year-over-year basis, pointing to a strong imbalance between supply and demand in the rental market.