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The Phenomenon of Home Ownership in Canada

25 September 2012

How many times have you heard, “Owning a home is the greatest asset you’ll ever have”? Or, “Until you own a home, you should be saving every cent you have for a down payment”? Or something along those lines? And while owning a home is definitely the biggest asset most people will ever have, and it is something to definitely strive for, have we allowed this rhetoric to take over? Has owning a home become the most important thing to us? And if so, is that a bad thing?

First, let’s look at how important owning a home has become in Canada.

We currently sit at around 70 per cent home ownership in our country, meaning that a very small minority are actually still renting. That’s a high number – higher than what’s being seen in the States right now, where 65.4 per cent of their population call themselves homeowners. And it’s drastically low compared to other parts of the world. In Europe only 30 per cent of people own a home; and in parts of South America it’s very common for people to wait until they have 70 – 80 per cent saved for their down payment before they buy a home.

So why the difference in Canada? And while our housing market may be cooling, it’s clear that there’s not going to be any real slowdown any time soon. So again, why?

Researcher Michael Haan says that it’s due to a way of thinking, based on a forced way of life, that has been passed down through the generations. He points to European history, where once there was an aristocracy that disallowed citizens to own land, or homes. North America though, promised “free land.” And so, many have simply been born thinking that they have a right to own. Or at least made it the most important thing we should try to attain.

“What do you do with free land?” asks Haan. “You build a house on it. So that mentality has prevailed over time.”

Housing prices are still much higher in Europe than they are in North America. So while our land’s not exactly free, it is quite a bit cheaper than you’ll find across the pond. And, given that our disposable income is also quite a bit higher, those overseas simply don’t have the money to spend on homes. To go along with that, they also don’t have the pressure on them to buy.

“The average individual probably finds housing to be out of reach,” says Haan when referrign to European citizens. “Therefore the stigma of not being able to own a home is much lower because it seems everyone within a certain social class is unable to afford a home.”

But, one can’t make that argument without also pointing to the fact that our housing market, while busy, is also one of the strongest in the world. So obviously we’re doing something right, too. But are we making home ownership too much of a priority? And has it become a little more of a phenomenon than it should be? Let us know what you think by commenting in the section below or Liking us on Facebook and joining the conversation!

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