Renters Now Beating Homeowners in Canada: How Investing Outpaces Property Ownership

In a surprising twist for the Canadian housing market, a new PWL Capital study finds that renters — not homeowners — have seen faster wealth growth in most major cities, including Toronto.

1. Renting Doesn’t Mean Falling Behind

The study examined data from 2005 to 2024 across 12 metropolitan areas, comparing home equity growth with investment returns from renters who invest the difference between rent and mortgage costs.
Nationally, renters achieved 99% of homeowners’ net worth, and in cities like Toronto, Ottawa, and Montreal, renters actually came out ahead.

While homeownership has long been viewed as the safest path to wealth, the study shows that compound investment returns can match or exceed real estate appreciation, especially in markets where property values have stagnated.

2. Why Renters Are Winning

This phenomenon is not about cheap rent — it’s about efficient capital allocation.
When interest rates rise and housing prices plateau, homeowners face growing mortgage, tax, and maintenance costs.
Renters who invest the savings instead gain from steady 8.6% annualized returns on diversified ETFs held in tax-sheltered accounts (RRSP, TFSA, FHSA).

For example, if buying costs $2,000 per month while rent is $1,100, investing the $900 difference can result in higher net wealth over 20 years than property appreciation alone.

3. City-by-City Results