October 6, 2022
Growth of Renter Households Continues to Outpace Growth of Owner Households
Dynamics taking place in the Canadian housing market these days are good news for real estate investors.
Quite simply, more and more Canadians are choosing to rent homes today rather than buy them.
And the demand is putting a smile on the faces of property owners – from large real estate investment trusts to mom and pop operations and individuals.
Several recent reports have highlighted this shift in mentality across the country and it’s primarily fueled by the rising costs of home ownership.
The 2021 Canadian Housing Survey reported that the growth of renter households outpaced the growth of owner households, pushing down the homeownership rate in Canada. The 2020 Canadian Housing Statistics Program also highlighted that the share of owner-occupied dwellings had edged down from 2019 to 2020, while non-resident ownership remained low, said Statistics Canada.
According to the latest Statistics Canada data, the proportion of Canadian households who own their home—or the homeownership rate (66.5 per cent in 2021)—is on the decline in Canada after peaking in 2011 (69.0 per cent). The growth in renter households (+21.5 per cent) is more than double the growth in owner households (+8.4 per cent).
The study also found that adults under the age of 75 were less likely to own their home in 2021 than adults in that age range a decade earlier—especially young millennials aged 25 to 29 years (36.5 per cent in 2021 vs. 44.1 per cent in 2011).
“Recently built dwellings are increasingly likely to be occupied by renters—40.4 per cent of the housing built in the five years ending in 2021 was tenant-occupied, the highest tenant rate next to that of dwellings built in the 1960s post-war apartment boom, at 44.5 per cent. Over one-third of recently built dwellings, those constructed from 2011 to 2021, were occupied and primarily maintained by millennial (36.6 per cent) renters or owners in 2021, the largest share of any generation. Millennials also represented the largest share of condominium occupants (30.2 per cent) compared with the other generations,” explained the federal agency.
A recent Royal LePage survey also found that 60 per cent of Canadian millennials, people aged 26 to 41, who do not currently own a home believe they will one day. Of them, however, 52 per cent say they would have to relocate in order to achieve this milestone. When broken out by age, 62 per cent of respondents under the age of 35 say they believe they will own a home one day, compared to 56 per cent of those aged 35 and up. Meanwhile, 25 per cent of non-homeowner millennials across the country do not believe they will ever own a home, said the report.
The report said “young buyers continue to face significant challenges, as the cost of borrowing has become a barrier to affordability for many first-time buyers.”
So if you’re a landlord in Canada – big or small – and looking to rent out properties, it’s all a pretty good position to be in today and into the future.
Chris Chornohos has a passion for real estate and helping his clients reach their business goals by providing Real Estate Investors and Owners with the first class valuation and advisory services to close more deals. Chris is also an investor, builder and developer. Reach out to Chris today to help with your Real Estate needs.
