The distant dream of owning a home: Canada sees growing inequality in home ownership

Canada Standard

22-05-2025

Home ownership is often seen as a symbol of success and is linked to various life opportunities, like starting a family or growing your wealth. It's also often seen as the ultimate housing goal, while renting is seen as transitional. Eventually, everyone is expected to climb up the housing ladder from renting to owning.
Promoting home ownership is therefore at the centre of housing policy in many countries, including Canada. As of 2021, 67 per cent of Canadian households owned their home.
However, deteriorating affordability in recent years has placed home ownership out of reach for many and called into question the ideal of home ownership.
In a recent study, colleagues and I examined access to home ownership for different groups using census data from 1986 to 2021 in five metropolitan areas: Montreal, Toronto, Calgary, Edmonton and Vancouver.
Our findings suggest that, for many, owning a home has become a distant dream.
Based on statistical models that accounted for individual and household characteristics, we found that the probability of an average Canadian household owning a home (with or without a mortgage) improved steadily from 1991 to 2011, then dropped in 2016 and 2021, while the likelihood of owning with a mortgage substantially increased. This means growth in home ownership was primarily driven by mortgage debt.
This trend was happening at the same time as a shift started in the 1990s towards financialization that treated housing more as an investment than a social good.
Read more: Financial firms are driving up rent in Toronto - and targeting the most vulnerable tenants
The federal government stopped funding social housing programs, commercialized the Canada Mortgage and Housing Corporation (CMHC) and expanded its mortgage securitization programs.
In other words, mortgage liberation successfully promoted home ownership for some time until 2011.
All five metropolitan areas saw a decline in the number of renter households until 2011 (2016 for Montreal), when the number began increasing. In addition, outright ownership has become less prevalent over time.
These findings defy the expected sustained growth of home ownership that commodification and financialization were supposed to bring.
Another tenet of the home ownership narrative is that a free market provides equal opportunities for owning a home through two processes: the filtering process and mortgage liberalization.
The filtering model suggests that homes built for higher-income families slowly deteriorate and depreciate, and can become affordable for lower-income people. This process, coupled with the increased access to mortgages, is expected to eventually grant home ownership opportunities to all.
However, this mechanism is less likely to work for home ownership than for rentals. Owner-occupied homes often take a long time, sometimes decades, to depreciate. By the time they become available and affordable, the unit may require major and costly renovations.
In practice, many owner-occupied units often "filter up" rather than downward, through gentrification or acquisition by financial investors.
The increased access to mortgages does not benefit everyone either. Many low-income people or those without stable jobs do not qualify for mortgages, and racialized people are more likely to be denied access to credit due to discrimination.
Substantiating these counter-arguments are growing inter-generational and income inequalities in home ownership. All age cohorts saw improved access to home ownership up until 2021. However, the three age groups under 45 - 15-24, 25-34 and 35-44 - saw steady declines in home ownership rates.
These were mostly millennials and Gen Zers who face disproportionate affordability pressure compared to older generations.
Homeowners over 55 are also reckoning with affordability. We found the share of older homeowners holding a mortgage rose between 1986 and 2021 from 24 to 40 per cent for those 55 to 64, and from 10 to 26 per cent for the 65-74 age group.
In other words, more people are having to rely on larger loans and longer amortization periods to buy and maintain their homes, making it harder to pay back their mortgage before retirement.
The disparities in home ownership opportunities among different incomes have also increased. While the top 20th percentile income group witnessed increased probability of owning a home between 2011 and 2016, other income groups experienced stagnant or decreased chances.
Among owner households, Canadians across all incomes saw increased mortgaged ownership from 1996 to 2016. The lowest income group saw the fastest growth in mortgaged home ownership but were still the least likely to own with a mortgage due to low income or discrimination. Rising house prices coupled with loosening mortgage lending regulations may have pushed them into mortgaged ownership.
A final compelling narrative is that home ownership affords better well-being and financial security due to higher perceived social status and a stronger sense of autonomy and stability.
The financial security associated with home ownership is supported by the idea of "housing asset-based welfare." This model conceptualizes home ownership as a means for young people to build assets for financial security in times of need and old age.
However, this approach encourages early-life debt, and may only work if mortgage loans remain affordable until they are paid off. Paradoxically, this asset-building mindset drives speculative investment and house prices, making outright home ownership more difficult and mortgaged ownership less affordable.
The well-being associated with home ownership is debatable as well. My colleagues and I have shown elsewhere that perceived benefits to a person's well-being are not intrinsic to home ownership. Rather, they are created and normalized by a system that makes home ownership more secure and appealing than alternatives like renting.
In reality, the financial security associated with home ownership has been undermined by rising housing costs, especially for low- and moderate-income homeowners with mortgages.
Mortgaged homeowners with below-median incomes have seen their housing costs increase 25 per cent faster than their income over the study period, compared to five per cent for higher income families at the top 60th percentile.
Manual Aalbers, a human geography professor at Belgium's University of Leuven, has argued that home ownership today has slowly changed "from a policy goal into pure rhetoric ... a means to an end. Mortgaged home ownership increasingly is there to keep mortgage and financial markets going."
To say the least, the broken promises of home ownership point to the failures of our current housing system that creates a hierarchy of tenures and two tiers of social class - homeowners and renters.
Policies aimed at creating a fairer housing market are essential. These include improving home ownership affordability by providing more diverse types of housing for ownership and discouraging speculative investment.
Such policies should also include enhancing housing security and asset-building opportunities for renters, and supporting the role of non-profits and social enterprises in meeting the needs of a broad range of income groups.