Home ownership in Canada fell for the first time in over 45 years, according to a Point2Homes study released this week. It had reached a record high of 69 percent in 2011, but as of 2016, it fell to 67.8 percent.
Using 2016 Statistics Canada census data, the study showed that the drop in home ownership was broad-based, declining in 88 of Canada’s 100 largest cities.
The collapse in oil prices that started in mid-2014 and the ensuing recession in Canada’s economy marked a turning point in the homeownership story, according to the study, which also cited analysis by Maclean’s. As the purchasing power of consumers fell while home prices kept climbing, homeownership rates fell.
Another factor contributing to the decline is the fact that millennials have a lower homeownership rate than baby boomers did at the age of 30, according to Statistics Canada. And, increasingly, young adults are living with their parents.
The effect of house prices has the greatest impact on homeownership. Vancouver and Toronto, Canada’s two least affordable housing markets, also have two of the lowest home ownership rates in the country at 44 percent and 51 percent respectively.
And Alberta, which suffered acutely from the oil price shock, has the third highest homeownership rate of any Canadian province or territory, since housing there is relatively affordable.
Montreal, long known as a renter’s city, has the lowest proportion of homeowners at 37 percent. Caledon, Ontario, has the highest proportion at 90.8 percent.
Quebec has nine of the top 20 cities with the lowest homeownership rates in the country. According to the province’s real estate board, home ownership is considered to be less important than in other parts of the country.
(Courtesy Canadian Real Estate Association)Canada does not benefit from the tax deductibility of mortgage interest, a factor that should encourage home ownership. Nevertheless, in the United States, with the tax benefit of home ownership, the national rate is 64.3 percent, according to the U.S. Census Bureau.
Homeownership in the United States peaked at 69.2 percent in 2004 and had been gradually falling, until it began to rise again in 2016.
Homeownership remains the norm in Canada, with owners outnumbering an increasing amount of renters by more than two to one.
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