A summary of how the housing market in this country has been altered since 2011.
Statistics Canada (StatsCan) recently released its latest report on the state of housing in Canada, based on its 2021 Canadian Housing Survey.
This report, which details and analyzes changes and trends in the country’s housing market between 2011 and 2021 revealed that Canadthis past decade has seen several notable shifts in areas such as rentals vs. home ownership, preferred type of dwelling, as well as housing affordability and value.
Overall, this report focuses on many elements of why the housing market has shifted but places particular focus on the changes to consumer preferences incited by the COVID-19 pandemic.
The following is a recap of key insights from the 2021 Canadian Housing Survey.
Several prominent notes can be taken from StatsCan and their latest housing survey.
- The change in housing supply and demand, coupled with Canadians’ modified expectations for the future, has led to large changes in home prices
- Housing prices continued to rise through February 2022, before dropping over the spring and summer due to interest rate hikes designed to curb inflation
- Two out of five households downtown (39.9%) were living in condominiums in 2021 and over half (50.1%) of these downtown condominiums were being rented
The need for core housing has decreased, but it remains noteworthy
“Core housing need” is defined as “living in an unsuitable, inadequate, or unaffordable dwelling and not [being] able to afford alternative housing in [the] community.”
Due in large part to improvements in housing affordability and personal income, the overall percentage of people in this circumstance has dipped from 12.7% to 10.1% between 2016 and 2021.
This number, which still, unfortunately, amounts to approximately 1.5 million Canadians in 2021, includes 603,040 children (8.8%). On the bright side, again, this percentage of children needing core housing is down 4.5% from five years prior (13.3% in 2016).
Millennials with a roommate were reported as less than half as likely to live in “core housing need” as Millennials living alone (7.4% to 15.3%, respectively).
Higher incomes have positively shifted perceptions of housing affordability
Moving forward with one of the key reasons Canadians are experiencing less core housing need, homeowners across this country are seeing higher levels of personal income. This has resulted in a dip of over three percent in the rate of unaffordable housing.
In other words, 24.1% of Canadian households in 2016 spent 30% or more of their income on shelter costs. This figure was reported at 20.9% in 2021. One significant reason that many perceived their housing to be more affordable was the income-based impacts that both renters and homeowners experienced due to temporary COVID-19 benefits.
Rather unsurprisingly, renters of dwellings in 33 of 42 surveyed downtown areas within urban centers across Canada experienced higher-than-average unaffordable housing rates but generally, “the rate of unaffordable housing in Canada for renters fell from 40.0% in 2016 to 33.2% in 2021.”
Home values are trending upwards over time
In a similar upward trend as personal income levels, “expected home values rose in large and small municipalities (census subdivisions, or CSDs) in Ontario and British Columbia from 2016 to 2021.”
More specifically, 77.8% of homes within CSDs in Ontario witnessed an increase in expected home value of over 50%. The same is true for 46.1% of CSD homes in British Columbia.
More Canadians are starting to prefer condominium living, as more condos arise
On the topic of value, more Canadians are starting to value the idea of taking up dwelling in a condominium. In fact, the percentage of “occupied dwellings that are condominiums” has gone up almost two percent since 2016, from 13.3% then to 15% in 2021.
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This reality aligns with the amount of space that condos are beginning to take up in Canada’s census metropolitan areas (CMAs), where 90% of Canada’s condominiums are located and condos make up 39.9% of occupied dwellings in these areas as of 2021.
An increasing number of new dwellings are being rented
Further to the idea of newly built living spaces, StatsCan’s reporting indicates that, of the housing built between 2016 and 2021, 40.4% of dwellings were occupied by renters. This represents the second-highest tenant rate across Canada, trailing only residences constructed during the surge in post-war apartments built in the 1960s.
Delving deeper into the profiles of Canadians occupying recently built residences, more than one-third (36.6%) of all living spaces built between 2011 and 2021 was occupied by Millennial renters and owners as of 2021. This was the largest share of any generation, the same generation that represented the largest share of condominium owners at 30.2%.
Rental living is increasing more than twice as quickly as home
In line with the above trend regarding an increase in renting across Canada, home ownership has seen a 3.5% drop over the last decade—from 69% in 2011 to 66.5% in 2021. In other words, a clear decline is occurring in the proportion of Canadian households who own their home, which is coinciding with a growth in renter households (+21.5%) that is close to tripling the current growth in owner households (+8.4%).
This can be partially attributed to the new housing preferences of younger Canadians, as it is becoming clear that younger adults are less likely to own their homes in 2021. Compared to adults under 75 years old a decade prior, adults in this age range in 2021 have made it clear that they do not desire to own a home—typified by young millennials aged 25 to 29, 44.1% of whom expressed ownership desire in 2011 but only 36.5% of people in that same age group share that desire now.