Chances of Owning House Declining

A recent study from Simon Fraser University highlights the growing inequality in home ownership across Canada, particularly affecting younger generations and lower-income families who find it increasingly difficult to enter or maintain a position on the property ladder. The research, led by Yushu Zhu, analyzed census data from 1986 to 2021 in five major cities: Montréal, Toronto, Calgary, Edmonton, and Vancouver. Although home ownership rates in Canada improved consistently from 1991 to 2011, this trend has since reversed, with ownership rates declining by 2016 and 2021, and the increase in ownership being largely fueled by mortgage debt rather than outright ownership.

The study indicates that the likelihood of an average Canadian household owning a home improved steadily until 2011 but fell in 2016 and 2021, with a significant rise in the number of households owning homes through mortgages. This shift in ownership trends aligns with Canada’s move towards housing financialization in the 1990s, as federal support for social housing decreased and the Canada Mortgage and Housing Corporation (CMHC) was commercialized, leading to expanded mortgage securitization programs. While this made it easier for some to access credit, it also increased dependence on debt for home ownership.

The study points out that not everyone benefits equally from increased mortgage access, as many low-income households, gig workers, and racialized Canadians still encounter obstacles in obtaining credit or securing mortgages. Discrimination often leads to racialized individuals being denied access to credit.

The research also reveals a generational gap in home ownership. Although all age groups saw improvements until 2021, those under 45, especially Millennials and Gen Z, have faced consistent declines in ownership rates, while older Canadians are taking on more mortgage debt as they age. Between 1986 and 2021, the percentage of homeowners aged 55-64 with a mortgage rose from 24% to 40%, and for those aged 65-74, it increased from 10% to 26%. This trend indicates that many Canadians are relying on larger loans and longer repayment periods, raising concerns about financial stress as they approach retirement.

While the top 20% income group experienced an increase in home ownership between 2011 and 2016, ownership rates for other income groups either stagnated or declined. Notably, the lowest income group saw the fastest growth in mortgaged ownership but remains the least likely to qualify for mortgages due to financial limitations and systemic barriers. Additionally, mortgaged homeowners in the bottom 50% of income earners have faced a 25% increase in housing costs, compared to just a 5% increase for higher-income households..