UMVA has learned that a surprising trend is emerging in Canada's housing market, where recent immigrants are increasingly becoming homeowners, while Canadian-born individuals are seeing a decline in homeownership rates.
According to information obtained by UMVA, a new study tracked the home-buying trajectories of recent immigrants in seven provinces and Canadians between 25 and 54 years old from 2017 to 2021, revealing a striking shift in the homeownership landscape.
The findings show that the rate of owning a home among immigrants who have been in Canada for more than five years increased significantly, with Ontario seeing a jump from 35.7% in 2018 to 40.2% in 2021, a notable gain in a short period.
However, the number of Canadian-born home buyers in Ontario dropped from 50.7% to 47.8% during the same period, a concerning trend that highlights a growing gap between immigrant and native-born homeownership rates.
Despite having lower incomes than Canadian-born individuals, recent immigrants are purchasing more expensive homes by pooling resources among family members and taking on higher mortgage debt, a strategy that is paying off for many.
The homeownership gap between recent immigrants and Canadian-born individuals is particularly pronounced in Ontario, Alberta, and British Columbia, while the Maritime provinces and Manitoba see more similar rates for both groups.
“Homeownership was more common for recent immigrants who had been in Canada longer,” the study found, highlighting the importance of income growth, credit building, and wealth accumulation in achieving homeownership.
The study also reveals that the declining trend in homeownership among native-born Canadians stretches back to 2011, likely tied to the rapid growth in housing costs, which has far outpaced wage growth, making it difficult for many to afford a home.
However, recent immigrants in Ontario saw a significant increase in take-home pay, with median family earnings rising from $61,000 in 2018 to $75,000 in 2021, a $14,000 increase that helped fuel their growing homeownership rates.
In contrast, Canadian-born families in Ontario saw only a slight increase in income, from $107,000 in 2018 to $109,000 in 2021, a modest gain that was largely overshadowed by rising housing costs.
The study cites government policies, such as capital gains tax exemptions on primary residences and mortgage loan guarantees, as key factors helping immigrant families achieve homeownership and build wealth in Canada.
As Canada continues to welcome historic numbers of immigrants, researchers expect housing demand to increase, making it essential to understand the complex dynamics driving these trends and ensure that homeownership remains within reach for all.
