After almost half a century of uninterrupted growth, Canada’s homeownership rates took a dip following the collapse in oil prices that started in 2014. Homeownership had reached an all-time high of 69% in 2011, but data from 2016 revealed a trend reversal, with the share of home owners falling to 67.8%, adding more pressure to the already competitive world of real estate agents.
CREA counts over 122,000 members, a number that nearly doubled since the early 2000s. This translates into one REALTOR® for every 223 Canadians over the age of 20. Even in today’s red-hot real estate market, this means some serious competition in a time when volatility seems to be the name of the game .
This volatility became more evident when the economic decline starting in 2014 triggered the deterioration of homeownership rates all across the country. Working with Statistics Canada census data, a new study from Point2 Homes showed that the decline is extensive, encompassing 11 of the 13 provinces and 88 of the 100 most populous cities in the country.
Economic downturn weakens purchasing power
The two main reasons behind the sudden decline in homeownership rates were the collapse in oil prices from 2014 and the burst of China’s speculative bubble. These events heralded an economic downturn for most of the globe’s commodities exporters, including Canada. While the country’s economic deceleration led to a decline in consumer purchasing power, it did little to stop home prices from continuing their upward trend, leading to the generalized decline in homeownership rates.
While the delayed transition to homeownership by millennials is another factor, the most significant force behind the trend change is increasing home prices. Toronto and Vancouver, two of the most unaffordable real estate markets in Canada, also have two of the country’s lowest homeownership rates, at 53% and 47% respectively. In fact, Vancouver is one of only three markets in Canada where renters comprise the majority population; only Victoria, BC and Montréal, QC have lower shares of home owners.
Homeownership rates down in 11 of 13 provinces
The only two provinces where the share of home owners went up since 2011 are Québec and Northwest Territories. However, with 61.3% and 53.7%, these jurisdictions continue to have two of the lowest rates of homeownership in Canada.
Nunavut has the absolute lowest share of homeowners in the nation: in this province, only 20% of people own their homes. The high costs associated with owning, together with a critical shortage of housing represent the main obstacle on the path to homeownership.
The provinces that lead the way when it comes to high homeownership rates are Alberta, with a rate of 72.4% in 2016, New Brunswick (74.4%), and Newfoundland and Labrador (76.7%). Affordability is much less of an issue in these provinces and consumer confidence, stemming from job sustainability and higher incomes, also contributes greatly to a healthy climate for homeownership.
Share of home owners decreases in 88 of Canada’s 100 largest cities
Despite minor drops compared to 2011, Caledon, ON and Vaughan, ON have homeownership rates above 90%. In fact, 9 of the 10 cities with the highest share of homeowners are in Ontario. Only Alberta manages to keep Ontario from monopolizing the top ten: St. Albert, AB posts the eighth highest homeownership rate in Canada.
At the other end of the spectrum, Montréal, QC (37%) has the lowest share of homeowners of all the cities included in the analysis, followed by Victoria, BC (39%) and Vancouver, BC (47%).
The drop in the share of home owners means the number of renters went up nationwide. At the time of the last Census, 4.6 million Canadians were renting their home, meaning the share of renters went from 31% in 2011 to 32.2% in 2016. Despite these major changes, homeownership remains the norm in Canada, as owners outnumber renters more than two-to-one .