New Canadians are driving force in real estate, says report
Last Updated: Thursday, July 9, 2009 | 3:35 PM PT
CBC News
Canadian immigrants are narrowing the homeownership gap with their Canadian-born counterparts, according to a new report Thursday by Scotia Economics.
The report compared census data from Statistics Canada from 2001 and 2006, when the housing boom was near its peak and unemployment was low.
The report indicates that in 2006, 72 per cent of immigrants lived in an owned home. That's compared with 68 per cent in 2001, an increase of four percentage points.
At the same time, the percentage of Canadian-born people choosing home ownership over renting rose by only two percentage points to 75 per cent, up from 73 per cent.
"Homeownership tends to increase the longer one has lived in Canada, with the majority of new arrivals first settling in rental accommodation," Adrienne Warren, a senior economist with Scotia Economics, said in a release.
"Over time, immigrant families eventually make the move to homeownership, at rates similar to the Canadian-born population. However, between 2001 and 2006, the homeownership rate rose for all immigrant groups, regardless of how long they had resided in Canada. The biggest increase was among those living in Canada for less than 10 years."
Warren said the faster transition to home ownership was likely due to two factors.
"I think it's that we've had a very strong job market, and that has allowed people to make the step from being a renter to homeowner perhaps faster than in the past," she said.
"I think it also has to relate to mortgage [and] market conditions, [and] the fact that we've had historically low mortgage rates that has made buying a home cheaper."
Because the analysis was based on data from 2001 and 2006, it was unclear what effect the current recession might be having on the number of immigrants and others entering the housing market.
It was clear from the report, however, that Scotiabank expects that trend in real estate to continue.
"Given Canada's aging population and relatively low fertility rates, longer-term household formation and housing needs will be largely determined by immigration," Warren said.
with files from the Canadian Press
