A recently released study prepared by Vancouver consulting firm Urban Futures for the Toronto Real Estate Forum predicts that Canada will need additional 4.5 million homes over the next 28 years due to population growth (including immigrants to Canada) and increased life expectancy. That 4.5 million homes breaks down as follows: 3.16 million new ground-oriented units (such as detached homes, row houses, duplexes or triplexes) and 1.36 million apartments.
Previous forecasts had predicted that in the mid 2000’s, when baby boomers began to downsize, the housing market would crash because there wouldn’t be enough buyers to take their place. However, that hasn’t happened. In fact, housing occupancy and prices have increased more in the 2000’s than in the previous decade, as the report notes:
Since 2000, the number of occupied homes in Canada has grown by an average of 185,000 units per year (more than 2.2 million homes in total), which is eight percent above the previous decade’s average additions of 172,000 units. Housing starts have averaged 200,000 per year, which is 37 percent above the previous decade’s 146,000 annual starts. And housing prices have risen by an average annual rate of seven percent, well above the 2.4 percent annual increases of the previous decade.
Urban Futures’ report looks at data form Statistic Canada’s Annual Demographic Estimates and its Census and new National Household Survey. It looks at patterns in household movement and finds an increasing tendency among younger and older Canadians to live with family rather than maintaining their own household (this mirrors a similar housing trend in the United States). Meanwhile, household maintainers in middle age groups (40 to 69 years old), have a greater tendency to occupy ground-oriented units as opposed to apartment units, while their younger counterparts tend to favour apartments.
The report also examines housing growth and change in several major cities. In Vancouver, population growth has actually declined since its peak in 2009. But the Vancouver census metropolitan area (CMA) is projected to grow by over a million people over the next 28 years, with a slowdown in population growth as many of the area’s inhabitants age in the later part of that period. Not surprisingly, Vancouver has some of Canada’s highest apartment maintainer rates.
The Victoria Capital Region is expected to grow from around 375,000 residents today to nearly half a million by 2041, with above-average growth expected for the 65 to 74 age group and a 109 per cent increase in residents over the age of 85.