Homeownership and Shelter Costs in Canada

Highlights

Homeownership

  • New data from the 2011 NHS showed that 69.0% of households in Canada, or 9.2 million of 13.3 million, owned their dwelling.
  • The homeownership rate was similar to the rate in the 2006 Census—indicating stabilization in the homeownership rate after a period of increasing growth between 1991 and 2006.
  • Four in five (82.4%) couple-family households owned their dwelling, while less than half (48.5%) of non-family households owned their dwelling. Just over half (55.6%) of lone-parent households owned their dwelling.

Shelter costs and affordability

  • About 3.3 million households (25.2%) spent 30% or more of their total income on shelter—which is the threshold defined by the Canada Mortgage and Housing Corporation (CMHC) to measure housing affordability.
  • Households with shelter costs exceeding the affordability threshold paid an average of $1,259 per month—exceeding 30% of their household total income by an average of $510 per month.
  • Owner households exceeded the affordability threshold by an average of $617 per month, while tenant households exceeded it by $403 per month.
  • Almost three-fifths (58.6%) of owner households had a mortgage—representing over four-fifths (83.2%) of owner households exceeding the affordability threshold.
  • About half a million (557,435 or 13.7%) tenant households lived in subsidized housing.
  • Just over one-third (36.9%) of tenant households in subsidized housing paid 30% or more of total income towards shelter costs.
  • Lone-parent households and non-family households were more likely to pay 30% or more of total income towards shelter costs—about twice the proportion of couple-family households.

Housing market activity of owners

  • Of the approximately 9.2 million owner households in 2011, about 2.6 million (or 28.1%) had moved into their dwelling between 2006 and 2011—reflecting a large part of residential real estate market activity over this five year period.
  • Of these 2.6 million households, about 1.5 million (or 58.6%) were local housing market purchasers, and the remaining 1.1 million (or 41.4%) were purchasers from outside the municipality.
  • Almost one-third (31.5%) of households that bought a home between 2006 and 2011 had a primary household maintainer aged under 35 years.
  • About four in five households that bought a home between 2006 and 2011 had a mortgage.
  • About one in five households that bought a home between 2006 and 2011 chose a condominium unit.

Text Box 1: National Household Survey

This is the third release of data from the National Household Survey (NHS). Roughly 4.5 million households across Canada were selected for the NHS, representing about one-third of all households.

This analytical document contains the results from the NHS on housing. A companion analytical document, Income Composition in Canada, Catalogue no. 99-014-X2011001, analyses findings from the NHS on income.

In addition, there are three articles in the NHS in Brief series entitled Condominium dwellings in Canada, Education and occupation of high-income Canadians and Persons living in low-income neighbourhoods, Catalogue no. 99-014-X2011003.

Further information on the National Household Survey can be found in the National Household Survey User Guide, Catalogue no. 99-001-X. Specific information on the quality and comparability of NHS data on housing can be found in the Housing Reference Guide, National Household Survey, Catalogue no. 99-014-X2011007.

End of text box 1.

Part 1: Snapshot of homeownership

More than two-thirds of Canadian households owned their dwelling

New data from the 2011 National Household Survey (NHS) showed that 69.0% of households in Canada, or 9.2 million of 13.3 million households, owned their dwelling. The homeownership rate was similar to the rate in the 2006 Census—indicating stabilization in the homeownership rate after a period of increasing growth between 1991 and 2006 (Figure 1). Estimates from the 2006 Census showed that 8.5 million of 12.4 million households in Canada, or 68.4%, owned their dwelling.Note 1

Households in the Atlantic provinces had the highest homeownership rates in the country. Newfoundland and Labrador ranked the highest at 77.5%. Households in Quebec had the lowest rate at 61.2% among the provinces. The homeownership rate in the territories was below the national rate. Among the provinces and territories, only Nunavut had fewer households who owned versus rented their dwelling—the homeownership rate was 21.0% (Figure 2).

Higher ownership rate in recently built apartment buildings than in older ones

Households in apartment buildings had the lowest homeownership rate among the different structure types—about one-quarter owned their dwelling (29.1% for apartments in buildings of five or more storeys, and 23.0% for apartments in buildings with fewer than five storeys). With the increase in condominium units, a higher proportion of units in recently built apartment buildings than in older ones were owner occupied. The document Condominium dwellings in Canada, Catalogue no. 99-014-X2011003, in the NHS in Brief series, provides additional information on condominium dwellings.

In apartment buildings built between 2001 and 2011, about one-half of households owned their apartment. In contrast, in apartment buildings built prior to 1981, less than one-quarter of households owned their dwelling (Table 1). About 90% of single-detached houses were owner-occupied, regardless of when the dwelling was constructed.

Households in apartment buildings represented about a quarter (27.2%) of Canadian households. The majority of households (55.0%) lived in single-detached houses. Households in other structure types (row houses, semi-detached houses, duplexes, movable dwellings, and other single-attached dwellings) represented just under a fifth (17.8%) of Canadian households.

Households with a primary maintainer aged under 35 years were more likely to own than rent when their household total income was $60,000 or more

In general, the homeownership rate was higher for households with an older primary household maintainer,Note 2 up to the age of 75 years, after which the rate started to decrease. Households with a primary maintainer aged under 35 years had a homeownership rate of 46.9%. The rate for those aged 65 to 74 years was 76.2%. And, the rate for those aged 75 years and over was lower at 70.5%.

However, most differences in homeownership rates were among households with a primary household maintainer aged under 35 years—with younger households in this age group having a lower homeownership rate than older ones. For those aged under 35 years, a large proportion of households change from being renters to owners.

Households with a primary maintainer aged under 25 years had a homeownership rate of 23.8%, while those with a primary maintainer aged 25 to 29 years had almost double (44.1%) the rate. The rate for those aged 30 to 34 years was higher at 59.2%.

Household total incomeNote 3 was also a factor in homeownership. Across all age groups, households with higher annual household total income had higher homeownership rates. In particular, households with a primary maintainer aged under 35 years were more likely to own than rent their dwelling when their annual household total income was $60,000 or more (Table 2).

Four in five couple-family households owned their dwelling, while less than half of non-family households owned their dwelling

Households with a couple familyNote 4 had the highest prevalence of homeownership with four in five (82.4%) owning their dwelling. Non-family householdsNote 5 had the lowest prevalence of homeownership—less than half (48.5%) of non-family households owned their dwelling. The proportion of lone-parent households that owned their dwelling was just over half (55.6%).

Part 2: Shelter costs and affordability

Households paid just over an average of $1,000 per month towards shelter costs

In 1986, the Canada Mortgage and Housing Corporation (CMHC) and the provinces agreed which expenditures to consider as shelter costs for the purposes of measuring housing affordability. Shelter costs for owner households include, where applicable, the mortgage payment, the costs of electricity, heat, water and other municipal services, property taxes and condominium fees. Shelter costs for tenant households include, where applicable, the monthly rent and the costs of electricity, heat, water and other municipal services.Note 6

In 2011, the average monthly shelter cost paid by households in Canada was $1,050. The shelter cost was different between owner and tenant households. Households that owned their dwelling paid an average monthly shelter cost of $1,141, compared to $848 for tenant households.

The shelter cost was different across census metropolitan areas (CMAs). Toronto had the highest average monthly shelter cost ($1,366), while Trois-Rivières had the lowest average ($697). The NHS Focus on Geography Series, Catalogue no. 99-010-X2011005, provides shelter cost estimates for all census metropolitan areas (CMAs) and census agglomerations (CAs).

Over three million households (one-quarter) paid 30% or more of their household total income towards shelter costs

In 1986, the Canada Mortgage and Housing Corporation (CMHC) and the provinces agreed to measure housing affordability based on whether the household spent 30% or more of its average monthly total income on shelter costs.Note 6

About 3.3 million households (25.2%) spent 30% or more of their household total income on shelter costs. Of these 3.3 million households, about 1.7 million owned their dwelling and about 1.6 million rented.

Although the number of owner households and tenant households that paid 30% or more was about the same, a larger proportion of tenant household exceeded the affordability threshold. In 2011, 40.1% of households that rented their dwelling paid 30% or more of their total income towards shelter costs, compared to about one-fifth (18.5%) of owner households.

The proportion of households that paid 30% or more of total income towards shelter costs differed across CMAs. Vancouver had the largest proportion (33.5%), while Saguenay had the smallest proportion (18.9%). The NHS Focus on Geography Series, Catalogue no. 99-010-X2011005, provides estimates of the number of households that paid 30% or more of total income towards shelter costs for all CMAs and CAs.

Households with shelter costs of 30% or more of total income exceeded what was considered affordable by about $500 per month

Households that paid 30% or more of total income towards shelter costs had an average shelter cost of $1,259 per month—exceeding 30% of their household total income by an average of $510 per month. Owner households that exceeded the affordability threshold did so by a larger amount compared to tenant households.

Owner households that exceeded the affordability threshold paid an average of $1,583 per month—exceeding 30% of their household total income by an average of $617 per month. Tenant households that exceeded the affordability threshold paid $928 per month—exceeding 30% of total income by an average of $403 (Table 3).

Over four in five owner households that paid 30% or more of total income towards shelter costs had a mortgage

In 2011, almost three-fifths (58.6%) of owner households had a mortgage. The average shelter cost for households that owned their dwelling with a mortgage was three times higher compared to the average for owner households that were mortgage-free ($1,585 per month vs. $511 per month).

Households with a mortgage represented over four-fifths (83.2%) of the owner households that paid 30% or more of total income towards shelter costs. Households with a mortgage that paid 30% or more of their total income towards shelter costs had an average monthly shelter cost of $1,776—exceeding 30% of total income by an average of $688 (Table 3).

Just over one-third of tenant households in subsidized housing paid 30% or more of total income towards shelter costs

In 2011, of the 4,060,385 tenant households, 13.7% (557,435) lived in subsidized housing and 86.3% (3,502,950) lived in non-subsidized housing. The average shelter cost for households that rented and received a housing subsidy was $552 per month—compared to $895 per month for tenant households in non-subsidized housing.

Just over one-third (36.9%) of tenant households in subsidized housing paid 30% or more of total income towards shelter costs—a slightly lower proportion when compared to tenant households in non-subsidized housing (40.6%).

Tenant households in subsidized dwellings that paid 30% or more of total income towards shelter costs had an average monthly shelter cost of $703—exceeding 30% of their total income by an average of $285 (Table 3).

Lone-parent households and non-family households were more likely to pay 30% or more of total income towards shelter costs

Regardless of housing tenure, the proportion of non-family households and lone-parent households that paid 30% or more of total income towards shelter costs was about twice the proportion of couple-family households (Figure 3).

The average household total income for couple-family households was about twice that of non-family households (which were primarily one-person households) and lone-parent households ($101,000 per year versus $43,000 per year and $55,000 per year respectively). Thus, while lone-parent households and non-family households had a lower shelter cost than couple-family households, the lower household total income results in a higher proportion exceeding the affordability threshold.

Part 3: Housing market activity of owners

The 2011 NHS collected information on where people lived five years ago, that is, on May 10, 2006. Households in the NHS in which all household members were at a different location in 2006 clearly moved dwellings between 2006 and 2011. Households that moved into dwellings they owned were assumed to have purchased or built the dwelling shortly before moving in; thus, it reflects the part of the residential real estate market, between 2006 and 2011, in which the dwelling was used as usual place of residence by the purchaser. This section uses mobility information of the household to analyze this part of the residential real estate market.Note 7

About 2.6 million households moved between 2006 and 2011 into dwellings they owned

Of approximately 9.2 million owner households in 2011, about 2.6 million (or 28.1%) had moved into their dwelling during the five years—reflecting a large part of the residential real estate market activity over the five years between May 2006 and May 2011.Note 8 Of these 2.6 million households that moved into dwellings they owned, about 1.5 million (or 58.6%) had at least one household member that moved within the same census subdivision (CSD). The remaining 1.1 million (or 41.4%) were households where all members moved from outside the CSD (Table 4).

The proportion of owner households that had moved between 2006 and 2011 differed across CMAs. Calgary had the largest proportion of owner households that had moved (35.8%) while Windsor had the smallest proportion (20.4% of owner households). The NHS Data Table, Catalogue no. 99-014-X2011029, provides the number of owner households that moved for all CMAs and CAs.

Almost one-third of households that bought a home between 2006 and 2011 had a primary household maintainer aged under 35 years

Households with a primary household maintainer aged under 35 years participate in the housing market as they are making the decision to change from renting to owning. About one in three (31.5%) households that moved into dwellings they owned had a primary maintainer aged under 35 years. They represented almost three-quarters (73.2%) of owner households maintained by a person aged under 35 years.

About two-thirds (68.5%) of the households that bought a home were maintained by a person aged 35 years and over (Table 4). These are cohorts where the homeownership rate was stable—suggesting a large portion of them were already homeowners and changed homes.

About four in five households that bought a home between 2006 and 2011 had a mortgage

About four in five (79.7%) households that bought a home during the five years had a mortgage in 2011. This was higher than the proportion for households that did not move (50.3%).

The average owner-estimated dwelling value reported by owner households that moved was slightly higher than the average of owner households that had not moved ($359,000 versus $340,000 or a difference of +5.8%).Note 9 Across the CMAs, the average value reported by owner households that moved was within 15% of the average value reported by owner households that had not moved. It ranged from being -10.6% in Vancouver to being +14.7% in Moncton. The NHS Data Table, Catalogue no. 99-014-X201130, provides the average owner-estimated dwelling value reported by owner households for all CMAs and CAs.

About one in five households that bought a home between 2006 and 2011 chose a condominium unit

Households that bought a home during the five years chose a condominium unit to a larger degree than households that bought their home more than five years ago. About one in five (20.7%) owner households that moved during the five years moved into a condominium—compared to about one in ten (9.4%) for owner households that had not moved.

Overall, there were about 1.2 million owner-occupied condominium dwellings. Almost half (535,645 or 46.4%) of these dwellings were occupied by households that had moved in during the five years. The document Condominium dwellings in Canada, Catalogue no. 99-014-X2011003, in the NHS in Brief series, provides additional information on condominium dwellings.

Text Box 2: Concepts and definitions

Condominium dwelling: Refers to a private dwelling that is part of a condominium development. A condominium is a residential complex in which dwellings are owned individually while land and common elements are held in joint ownership with others.

Households that moved into owned dwellings as a reflection of part of the residential real estate market: Households that moved into owned dwellings between May 10, 2006 and May 10, 2011 were assumed to have purchased or built the dwelling shortly before moving in; thus, it reflects the part of the residential real estate market, between 2006 and 2011, in which the dwelling was used as usual place of residence by the purchaser. However, some households that moved into owned dwellings may have purchased the dwelling long ago. For example, households that previously used the dwelling as a secondary residence or households that rented out the dwelling prior to using it as their own usual residence.

Households that moved into owned dwellings include households that previously owned another dwelling, households that previously rented another dwelling, or newly formed households. Residential real estate market activity not captured with this methodology include sales of dwellings not used as a usual place of residence by the purchaser (such as a secondary residence or a residence purchased and then rented to another household) and multiple sales of the same dwelling between 2006 and 2011 (as only the move involving the household surveyed in the NHS is captured). MLS® sales, between 2006 and 2010, show there were 2.3 million home sales on the resale market. Also, there were 1.0 million housing starts between 2006 and 2010; and, about 90% of housing starts are typically intended for homeownership. Source: Canada Mortgage and Housing Corporation, 2012, Canadian Housing Observer, ISBN 978-1-100-16888-3.

A household was defined as having moved if all members of the household were at a different dwelling in 2006 (excluding persons that were not yet born). These households were further classified as being from the same census subdivision (CSD) or not from the same CSD. Households that moved were considered to be from the same CSD if at least one member of the household lived in the same CSD in 2006; otherwise, the household was not from the same CSD. The former group was assumed to represent local housing market participants; whereas, the latter group was assumed to represent housing market participants from outside the municipality. Moving from outside the municipality does not always imply a long distance move, such as when the move is from a neighbouring CSD.

Household total income: The sum of the total incomes of all members of that household. Total income refers to the total of income from all sources, including employment income, income from government programs, pension income, investment income and any other money income, before income taxes and deductions, during the calendar year 2010.

Housing affordability: In 1986, the Canada Mortgage and Housing Corporation (CMHC) and the provinces agreed to measure housing affordability based on whether the household spent 30% or more of its average monthly total income on shelter costs.

Primary household maintainer: First person in the household identified as someone who pays the rent or the mortgage, or the taxes, or the electricity bill, and so on, for the dwelling.

Shelter cost: Average monthly total of all shelter expenses paid by households that own or rent their dwelling. Shelter costs for owner households include, where applicable, the mortgage payment, the costs of electricity, heat, water and other municipal services, property taxes and condominium fees. Shelter costs for tenant households include, where applicable, the monthly rent and the costs of electricity, heat, water and other municipal services.

Shelter cost universe: The shelter cost universe includes households that were not in a dwelling on a reserve, that were not in band housing, and that were not in a dwelling on an agricultural operation operated by a member of the household. Households in these three scenarios are excluded because shelter costs were not collected or were not representative of the shelter costs in the entire community. The calculation of the shelter cost as a proportion of total income (the housing affordability indicator) also excludes from the universe households with negative or zero incomes. Shelter cost statistics presented in 'Part 2: Shelter costs and affordability' were based on the shelter cost universe. Statistics on the group of households that paid 30% or more of household total income towards shelter costs also exclude households with zero or negative total income.

Subsidized housing: Refers to whether the rented dwelling is subsidized. It includes rent geared to income, social housing, public housing, government-assisted housing, non-profit housing, rent supplements and housing allowances.

Value of owner-occupied dwelling: The dollar amount expected by the owner if the dwelling were to be sold. Statistics on the value of dwelling were calculated on the shelter cost universe.

End of text box 2.

Additional information

Additional information on housing can be found in the NHS Data Tables, Catalogue nos. 99-014-X2011026 through 99-014-X2011031, the NHS Profile, Catalogue no. 99-004-X, as well as in the NHS Focus on Geography Series, Catalogue no. 99-010-X2011005.

Thematic maps showing housing are also available for various geographic areas.

For details on the concepts, definitions, universes, variables and geographic terms used in the 2011 National Household Survey, please consult the National Household Survey Dictionary, Catalogue no. 99-000-X. For detailed explanations on concepts and for information on data quality, please refer to the reference guides on the Census Program website.

Note to readers

Random rounding and percentage distributions: To ensure the confidentiality of responses collected for the 2011 National Household Survey while maintaining the quality of the results, a random rounding process is used to alter the values reported in individual cells. As a result, when these data are summed or grouped, the total value may not match the sum of the individual values, since the total and subtotals are independently rounded. Similarly, percentage distributions, which are calculated on rounded data, may not necessarily add up to 100%.

Due to random rounding, estimates and percentages may vary slightly between different 2011 National Household Survey products, such as the analytical documents and various data tables.

Comparability between estimates from the 2006 Census long form and the 2011 National Household Survey estimates: When comparing estimates from the 2006 Census long form and estimates from the 2011 National Household Survey (NHS) users should take into account the fact that the two sources represent different populations. The target population for the 2006 Census long form includes usual residents in collective dwellings and persons living abroad whereas the target population for the NHS excludes them. Moreover, the NHS estimates are derived from a voluntary survey and are therefore subject to potentially higher non-response error than those derived from the 2006 Census long form.

Trends in the homeownership rate between the 2006 Census and the 2011 National Household Survey: Trends in the homeownership rate between the 2006 Census and the 2011 NHS were evaluated using other surveys that measure homeownership rates. The other survey sources confirmed the observation that the national homeownership rate in 2011 was similar to the rate in 2006. However, trends for most provinces and territories could not be validated due to high sampling variability in the other survey estimates. The homeownership rate in Alberta estimated by the NHS was higher (with a statistical significance) when compared to other sources.

Acknowledgments

This report was prepared by Jerry Situ and Sandrine LeVasseur of Statistics Canada's Income Statistics Division, with the assistance of staff members of Statistics Canada's Income Statistics Division, Census Subject Matter Secretariat, Geography Division, Census Operations Division, Dissemination Division and Communications Division.

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