We’ve all been waiting anxiously for the results of this year’s National Household Survey to be released, and now here they are. For those that have been waiting for earth-shattering news though, the actual results may not be all that shocking.
When it comes to overall home ownership rates, in 2011 the survey showed that 9.2 million households actually owned their home – that is, mortgage free. For those who prefer percentages, that’s a total of 69 per cent. That’s little changed from the results in 2006, when the home ownership rate was just slightly lower at 68.4 per cent.
That steady home ownership rate has come despite the fact that prices have been climbing steadily. As you can see from the chart above, average sale prices have jumped more than $100,000 in the past five years. Doug Porter, chief economist at BMO Capital Markets, believes that ownership has remained so steady in the face of higher prices because interest rates have been so low – perhaps another non-surprise for those analyzing the results of this survey.
“Interest rates, of course, have been coming down for about a 25-year period from the early 1980s up until 2006, and that brought home ownership within reach of more folks, somewhat offsetting the increase in prices,” he says. “Since that point we’ve had another rise in prices but we’ve also had another downward lurch in long-term interest rates to the point where they were at or close to all-time lows by 2011.”
But what about when you start breaking down that home ownership rate into categories? There aren’t many surprises there either. The higher the income, the higher the home ownership rates. And the higher the age, also the higher the ownership rate until of course, seniors get too long into that ‘no income’ category, which is when the ownership rate drops.
“Generally, the rule of thumb is the older you get, the more likely you are to own a home, up until a certain point, and then of course, it tips over the other way if you get well into the senior years,” says Porter.
And of course, it makes sense that the more money you have, the greater your chance of home ownership. As you can see from the chart above, those with an annual income of more than $100,000, nearly 100 per cent of individuals own their home outright. And that’s cut by more than half when incomes of individuals fall to less than $20,000.
But it can be difficult to guesstimate in which parts of the country hold the largest home ownership rate. Thanks to the survey, you don’t have to guess. As you can see from the chart above, Newfoundland and Labrador has the highest home ownership rates among the provinces, while Quebec has the lowest. When you break that up into cities though, it’s not a city in Newfoundland that has the highest ownership rate, but Oshawa, Ontario. It is however, in Quebec that has the lowest home ownership rate in Sherbrooke, which might be why Sherbrooke is one of the top ten affordable cities in Canada.
Where do you fall within the city? Do you own your home outright? And do you own your home in one of the highest home ownership regions, or one of the lowest?