Historical article note: This article was originally published on 2018-03-24. 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.
The results of the 2016 Canadian Census will be released in 2017. The Housing and Population Situation Report was released on May 3, 2017. Let’s take a look at the various housing situations in Canada and what living preferences people of different ages and regions have. I promised in the opening article of my official account that I would not write sensational articles, but that each article would provide information that can be stored for readers to save for future reference. Many of our herd-like ideas and practices come from a vague understanding of basic information. I hope that my efforts can provide readers with information that is objective and fair, but not necessarily fashionable, so as to provide a reference for readers to make their own independent judgments.
98% of Canadians live in privately owned housing, while only 2% live in publicly owned housing. Privately owned houses include detached houses, semi-detached houses, townhouses, apartments and other properties. Public property residences include hospitals, nursing homes, nursing homes, shelters, shelters, group rentals, apartments for the elderly and other non-private property residences. It can be seen that, without special circumstances, the vast majority of people in Canada either rent or own private property housing, and only very special groups live in non-private property residences. Calls for the government to stabilize housing prices so that everyone can afford a house are probably utopian. In a country where private property rights account for the vast majority of real estate, suppressing the legal asset prices of some people to please others is not what the government should do.
Among privately owned properties, there are about 7.5 million detached houses, accounting for 53.% (the last census in 2011 accounted for 55% of detached houses). Although this proportion has been declining over the past 30 years, detached houses have always been the largest type of property. Detached houses are considered the “standard feature” of Canada’s middle class and can also be said to be part of the Canadian dream. However, with urbanization, purchasing power, long-distance transportation, and aging, the proportion of Canadians living in detached houses has been declining year by year in the past 30 years. As of the 2016 census, 14.1 million people lived in single-family houses, accounting for 40% of the population. Detached houses account for 54.3% in Ontario and 44.1% in BC. Detached houses account for 45.4% in metropolitan cities and 72.7% in non-metropolitan areas. Obviously, if you want to live in a detached house, you have to stay away from the city, because the price of detached houses in the city is becoming increasingly unaffordable.
Apartments with five floors or less accounted for 18% of all private property properties, high-rise apartments with five floors or above accounted for 9.9%, duplex/duplex apartments accounted for 5.6%, and other types of properties such as townhouses and duplexes accounted for 12.9%.
There are 213.6 privately owned properties in Toronto, of which 39.6% are detached houses, 29.4% are buildings with more than five floors, 10% are buildings with less than five floors, 4.2% are duplex/duplex apartments, and 16.8% are other types of properties such as row houses and semi-detached houses. There are 961,000 privately owned properties in Vancouver, of which 29.4% are detached houses, 16.7% are buildings with more than five floors, 25.2% are buildings with less than five floors, 16.3% are stacked/double-storey apartments, and 12.5% are other types of properties such as townhouses and semi-detached houses. It can be seen that the proportion of independent houses in metropolitan areas is relatively low. Independent houses in metropolitan areas are no longer a standard feature of the middle class, but a luxury item.
As of 2016, 425,700 Canadians, approximately 1.2% of the population, lived in publicly owned residences such as nursing homes and senior housing. It seems quite difficult to live in government-subsidized housing, as one has to be old enough and in poor health.
Let’s take a look at Canada’s demographic structure and deduce some basic trends in the real estate market.
An important result of the 2016 census is that Canada has begun to age, but it still has the largest demographic dividend among G7 countries. Canada's birth rate peaked from 1946 to 1965, 20 years after the end of World War II, that is, during the baby boom period. As of 2016, the earliest batch of baby boomers in Canada have begun to enter the 65+ age group. Therefore, the biggest feature of this census is that for the first time in Canadian history, the number of young people under the age of 14 (5.8 million), accounting for 16.6%, is lower than the number of elderly people over 65 years old (5.9 million), accounting for 16.9%. At this rate, the proportion of Canadians over the age of 65 will be as high as 23% in 2031. The proportion of the labor force aged 15 to 65 is 66.5%, the highest proportion among G7 countries, and it is still enjoying the demographic dividend. Among the G7 countries, Japan has the lowest labor force-to-population ratio, only 62.1%. This is mainly due to low birth rate and low number of immigrants. Therefore, Japan's real estate market has also been sluggish for a long time. Because among the labor force population aged 15 to 65, people aged 55 to 64 account for as high as 21%. Canada’s aging population will accelerate in the next 10 years. If the federal government does not accelerate the absorption of new immigrants, Canada’s aging population will be close to the level of Japan in the next 10 years and the demographic dividend will be lost. Due to the addition of new immigrants, the pace of aging in Ontario is slower than the national average. The proportion of young people under 14 years old is 16.4%, the proportion of elderly people is 16.7%, and the proportion of labor force between 15 and 65 years old is 66.8%.
In the last census in 2011, the proportion of young people under 14 years old accounted for 16.7%, and the proportion of elderly people over 65 years old was only 14.8%. Five years later, the proportion of elderly people exceeded the proportion of young people, sending an important signal to the government about demographic changes. With the majority of the baby boomer population turning 65+, the issue of aging in Canada is officially on the table. If the government accelerates immigration and increases the number of immigrants, the demographic dividend can still be maintained. If the immigration policy develops in the opposite direction, Canada will lose the demographic dividend and real estate and other fields will fall into depression.
Census report tidbits: Canada is a country with longevity, especially for women. Between the ages of 65 and 84, the male to female ratio is 89 to 100. Between the ages of 85 and 99, the male to female ratio is 54 to 100. Men are reminded to buy enough life insurance so that your loved ones will not live too long and spend their money.
Let us put the above fragmented information into a puzzle: As of the 2016 census, Canada has a population of 35.2 million people, 14.1 million private property houses, and an average of 2.5 people living in a house. Among the property types, 53.6% are detached houses, 9.9% are buildings with five floors or more, 1.3% are mobile houses, 5% are semi-detached houses, 6.3% are townhouses, 5.6% are stacked/double-storey apartments, and 18% are apartments with five floors or less. It can be seen from this that the peak of Canadians’ demand for housing is detached houses. Whether and when residents living in detached houses are willing to move out and replace them with smaller houses is a big question mark when they get older. However, the trend can be determined that the supply of second-hand detached houses will increase with the aging of the population. Whether the current situation of more people and less people can be changed depends on the immigration policy. If the proportion of reunion immigrants increases, it will accelerate the aging of Canada, and the supply of detached houses will exceed demand; if the number of young skilled immigrants and experience immigrants increases, it will alleviate aging, balance the supply and demand of detached houses, and stabilize housing prices, or even push them to higher levels. A civilized standard for housing is that children of the opposite sex over the age of 5 have their own separate bedrooms. For a family of four, parents can figure out when the family will need at least 3 bedrooms as their children grow. If you buy your first house late and don't have enough time to accumulate housing rights, it will be very difficult to change houses. Suppose you are 21 years old, have graduated from college and have an income, and bought your first self-occupied apartment with the support of your parents. When you get married at 27, you need to switch to a second property with two bedrooms. There will be 6 years to accumulate housing rights. If you have two children, you will need a 3-bedroom property around the age of 34. There will be 7 years to accumulate housing rights. Changing houses is relatively easy. There have been people writing letters to the government and protesting, accusing "others" of speculating in real estate, making them unable to afford a house, but they just don't say that they didn't "buy early." There is only one opportunity to buy a house for self-occupation - "buy early". All the unhappiness, complaints, resentment, and guilt come from buying late and have nothing to do with the government. Buffett said that you must find a snow slope that is long enough, otherwise you will not be able to snowball wealth. Many new immigrants were over 34 years old when they came to Canada and were still waiting to see if they could buy a house. Such hesitant people will have no choice but to join protests and demonstrations in the future.
From 2011 to 2016, Canada's population grew by 5%. Among metropolitan areas, Toronto's population grew the fastest, with a growth rate of 6.2%. Toronto's population has been Canada's largest city since it surpassed Montreal in 1976, and its population growth is accelerating. If you want to have a place in Toronto, demonstrations will not work. There are too many people who want to come, and those who don't work hard may be forced to leave.