Historical article note: This article was originally published on 2018-03-12. Rates, policies, home prices, statistics, product names and qualification standards reflect the environment at that time and may have changed. This archive is for historical record and general education only. It is not mortgage approval, investment, legal or tax advice.
Canada conducts a census every five years. According to the Census Law, residents who do not cooperate with the Bureau of Statistics in conducting the census will face civil liability consequences. Therefore, the results of the Canadian census are very accurate and authoritative. The most recent census was conducted in 2016, and the results will be released in 2017. Census results regarding Canadian housing were released on October 25, 2017. The press release of the Housing in Canada report from the Bureau of Statistics summarizes the living conditions and views of Canadians on housing. The summary is as follows:
When the census was recorded in 1871, Canada had a population of 3.5 million, 600,000 houses, an average of 5.8 people living in a house, and an average house price of 2,300 Canadian dollars (equivalent to 70,000 dollars today). In 2016, Canada had a population of 35.2 million, living in nearly 14.1 million houses, with an average of 2.5 people living in a house, and an average house price of 440,000. As of the 2016 census, there were a total of 14.072 million privately owned houses in Canada. That is, what we call "housing" does not include wards, prisons, illegal group rentals, senior housing, etc. Judging from the above situation, with the progress of human civilization, although the population is growing rapidly, living conditions are improving faster, and the pursuit of better quality of life is one of the most basic material pursuits.
Buy a house? Rent? It is one of the biggest decisions in life. There are many deciding factors, including family finances, whether you plan to move elsewhere, and your attitude towards life. According to the 2016 census, Canada has a population of 35.2 million and 14.1 million households, that is, 2.5 people per household. 9.5 million households own their own homes, accounting for 67.8% of the total number of households. That is, the homeownership rate in Canada is 67.8%. In the 2011 census, the homeownership rate was 69%; in the 2006 census, the homeownership rate was 68.4%. From 1991 when the homeownership rate was 62% to 2006, it was a 15-year period of steady growth. In the 10 years after reaching 68%, the homeownership rate has been basically stable. Among the provinces, Newfoundland has the highest home ownership rate of 76.7%; Quebec has 61.3%, which is lower than Ontario and British Columbia.
The urban home ownership rate that everyone is more concerned about is this: due to the large floating population, the home ownership rate in cities is significantly lower than that in non-urban cities. The home ownership rate outside cities is as high as 77.7%. According to the definition of the Bureau of Statistics, cities with a population of more than 500,000 are defined as "metropolitans". There are 36 cities in Canada. Among them, the home ownership rate of 14 cities is lower than the national average and 22 is higher than the national average. Toronto's home ownership rate is 66.5%; Vancouver's 63.7%; Montreal's 55.7%, ranking last among all metropolitan cities. Calgary has the fastest growing home ownership rate, reaching 73% in 2016. Among cities, Oshawa and Barrie in Ontario have the highest home ownership rates, at 77.8% and 76.1% respectively.
In the face of the irrefutable evidence of demographics, one thing has subverted our previous views: As people get older, they can no longer take care of independent houses, so the elderly will move to condominiums and sell large houses to young families. Sorry, I was wrong. Statistics show that the elderly are more willing to own their own houses and live in larger houses. For people aged 20-34, the home ownership rate is 43.6%; for people aged 35-54, it is 70.1%; for people aged 55-64, the home ownership rate is the highest, reaching 76.3%; for people over 65 years old, the home ownership rate is still as high as 74.6%. Ten years ago, at the time of the 2006 census, the homeownership rate for people over 65 years old was 72.2%. It shows that in the past 10 years, the health of the elderly has been getting better and better, and it is naive and childish to expect large numbers of elderly people to move out of their big houses. Western countries define the "baby boom" as the birth peak. The "baby boom" lasted for 20 years from 1945 to 1965. Calculated in 2018, the old babies in the past should be 53-73 years old this year, and their home ownership rate is as high as 75%.
What is the housing situation like for young people, especially those born in the 1980s? Compared with the "baby boom" generation of their parents, the proportion of self-owned housing among those born in the 1980s is quite backward. In 1981, the home ownership rate of 30-year-olds was 55.5%. In 2016, the home ownership rate of 30-year-olds was only 50.2%, and only half of them own their own homes. In 2016, one-third of young people aged 21-34 neither rented nor bought a house but lived with their parents. Census results from 2001 to 2016 show that the proportion of young people living at home has increased year by year, reaching 30.6% in 2001, 33.1% in 2006, 33.3% in 2011, and 34.7% in 2016. It can be seen that in terms of home ownership, the proportion of young people who are unable to wean themselves is gradually increasing. It is particularly worth noting that the situation in Ontario is particularly serious. The national average of young people aged 21-34 living with their parents is 34.7%, and the figure in Ontario is as high as 42.1%, which is a full 20% higher than the 35% 15 years ago. It is the province with the highest proportion of young people in the country who love their families. Then you can imagine the situation in cities. Toronto's young people's home-loving index ranks first in the country, as high as 47.4%, and nearly half of young people live with their parents. The report from the Bureau of Statistics pointed out that the most serious situation is among the second generation of new immigrants, with a large number of young people living with their parents. However, the situation has eased a lot among the third and fourth generations of new immigrants. (The original text says this: Analyses from the 2006 Census and the 2011 National Household Survey(NHS) suggest that immigrants, especially those who arrived as children, and those who are second-generation Canadians (born in Canada but with at least one parent born outside of Canada) were more likely to live with a parent than were Canadians of the third or more generations) Move one generation, work hard, otherwise it will be difficult for the second generation to move out. Statistics Canada reports that the proportion of married children living with their parents in Canada is very low, only 2.5%, and has remained so for a long time.
The rise of condominiums is obvious to all, but what role do condominiums play in the living conditions of Canadians? The Bureau of Statistics report gives a clear description. In 2016, nearly 1.9 million households in Canada, or 13.3% of the total households, lived in apartments. This proportion was only 12.1% in 2011. Among households living in apartments, 67.1% own their apartments and 32.9% rent them. The situation in the city is this: Vancouver has the highest proportion of households living in apartments, at 30.6%, far higher than second place Calgary at 21.8%. Only one in five households in Toronto lives in an apartment, 20.9%.
Canada's official housing affordability standard is: if more than 30% of a family's income is spent on housing, it is defined as excessive housing affordability. Living burdens include: monthly mortgage payment or rent, apartment management fees, local taxes, water and electricity burdens, etc. According to the 2016 census results, according to the above standards, the proportion of overburdened households was 24.1%, slightly lower than the 24.4% in 2011. Toronto and Vancouver have the highest proportion of overburdened households, with 33.4% and 32% respectively spending more than 30% of their household income on living expenses.
Finally, let’s talk about the housing price issue that everyone is most concerned about. In 2016, the average house price in Canada was 443,000, and in 2011, the average house price was 345,000, an increase of 28.4% in five years. Among the three major cities in 2016, the average house price in Vancouver was 1.006 million, a 5-year increase of 45.5%; Toronto was 735,000, a 5-year increase of 48%; Montreal was 367,000, a 5-year increase of 15.4%. Many friends have doubts about whether the average house price can truly reflect housing prices. I personally believe that the average house price has a certain distortion of real purchasing power. I think the median house price can best reflect the purchasing power, excluding the impact of individual high-end real estate transactions on the overall housing price. Among the three major cities in 2016, the median house price in Vancouver was 800,000, with a five-year increase of 33.7%; Toronto was 647,000, with a five-year increase of 52.9%; Montreal was 300,000, with a five-year increase of 9.5%. From these figures, it can be seen that among the three major cities, Toronto has the fastest growth rate of population inflow and effective housing demand, and the largest increase in housing prices. A friend from Toronto asked me if I should invest in real estate in Montreal. This is how I think about this question: The essence of investing in real estate is to share the dividends of urban development, just like buying shares of a company, it is the same as sharing the growth of this company. If you think Toronto will develop faster than Vancouver or Montreal in the future, you should buy real estate in Toronto. If your judgment is the opposite, you can invest in real estate in other cities. The only way to invest in a city is to buy a house in the city. People who don't buy houses will never share the dividends of urban development.