StatCan: Economic Immigrants Catch Up to Canadian-born Homeowners Within Five Years

The report examined homeownership among immigrants who became permanent residents between 2017 and 2021 and found that ownership rates increased significantly during their first five years as permanent residents. By their fifth year, economic-class immigrants had homeownership rates comparable to Canadian-born individuals.

The findings also show the role affordability continues to play in newcomer housing outcomes. Recent immigrants living in the more affordable Maritime provinces and Manitoba were much more likely to own homes than those living in the more expensive provinces of Ontario, Alberta, and British Columbia.

What Statistics Canada Means by “Recent Immigrants”

Before diving into the numbers, it’s important to understand how Statistics Canada defines a “recent immigrant” in this report.

The study defines recent immigrants as people who became permanent residents within the previous five years. This is not necessarily the same as “arriving in Canada” within the previous five years.

Many immigrants first come to Canada as international students or temporary workers before later transitioning to permanent residence. As a result, some of the people included in the report may have already been working, building credit, and saving money in Canada for several years before becoming permanent residents.

In fact, the report found that more than 85 percent of immigrants who owned a home during their first year as permanent residents had previously lived in Canada as temporary residents. This helps explain why some newcomers appear able to purchase homes shortly after obtaining permanent residence.

Homeownership Rises Rapidly During the First Five Years After PR

Across every province included in the study, homeownership rates increased as immigrants spent more time in Canada after becoming permanent residents. The report didn’t examine all provinces, but focused on the following: Nova Scotia, Prince Edward Island, New Brunswick, Ontario, Manitoba, Alberta, and British Columbia.

In Ontario, the homeownership rate rose from roughly 7 percent among immigrants in their first year after admission to about 40 percent by their fifth year. Alberta saw a similar increase, while British Columbia rose from roughly 8 percent to nearly 38 percent over the same period.

The trend suggests that homeownership becomes more common as newcomers establish themselves in the workforce and spend more time building savings and credit history.

Economic Immigrants Have the Highest Homeownership Rates

The strongest homeownership outcomes were observed among economic-class immigrants. Economic-class immigration includes permanent residence programs primarily targeting workers and their families – like Express Entry, PNPs, and the Atlantic Immigration Program.

By their fifth year after becoming permanent residents, economic immigrants had homeownership rates that were comparable to Canadian-born individuals in several provinces.

In British Columbia, for example, economic immigrants in their fifth year had a homeownership rate of 40.1 percent, compared with 43.3 percent among Canadian-born individuals.

Family-sponsored immigrants generally had the second-highest ownership rates, while refugees had the lowest ownership rates regardless of province or time since admission.

The findings are consistent with how Canada’s immigration system is structured. Economic immigration programs select candidates based on factors such as work experience, education, language ability, and labour market potential, all of which can contribute to stronger earnings and purchasing power after admission.

More Affordable Provinces Offer a Faster Path to Homeownership

The report found significant differences between provinces. Recent immigrants living in the more affordable provinces of Prince Edward Island, Nova Scotia, New Brunswick, and Manitoba had some of the highest homeownership rates in the country. By their fifth year after admission, immigrants in these provinces had ownership rates that were similar to those of Canadian-born residents – averaging approximately 50 percent.

The gap between newcomers and Canadian-born residents was bigger in Ontario, Alberta, and British Columbia, where housing costs are generally higher.

For newcomers planning where to settle, these findings might make you want to consider some of Canada’s more affordable housing markets.

Recent Immigrants Gain Ground While Canadian-born Ownership Rates Decline

Statistics Canada also found that recent immigrants were more likely to own homes in 2021 than similar immigrant groups had been in 2018. During the same period, homeownership rates among Canadian-born individuals declined.

The report points to strong income growth among recent immigrants as one possible explanation. In Ontario, for example, median family income among recent immigrants increased from $61,000 in 2018 to $75,000 in 2021, while median family income among Canadian-born individuals increased from $107,000 to $109,000 over the same period.

Low interest rates during the pandemic period may also have helped some recent immigrants enter the housing market.

Recent Immigrants Buy More Expensive Homes Despite Earning Less

One of the report’s more surprising findings relates to the homes recent immigrants purchase. Across the provinces examined, recent immigrant first-time homebuyers had lower family incomes than Canadian-born first-time homebuyers. Despite this, the recent immigrants purchased more expensive homes.

In Nova Scotia, recent immigrant first-time buyers had a median family income of $105,000 and purchased homes with a median price of $390,000. Canadian-born first-time buyers had a median family income of $110,000 and purchased homes with a median price of $285,000.

In British Columbia, recent immigrants purchased homes with a median price of $660,000 despite having lower median family incomes than similar Canadian-born buyers.

One possible explanation for this is that recent immigrants are more likely to prioritize investment in home equity rather than retirement savings:

Home Equity Appears to be a Higher Priority than Retirement Savings

According to the report, immigrant homebuyers were substantially less likely to contribute to a Registered Retirement Savings Plan (RRSP) during the year they purchased a home. Statistics Canada suggests that some newcomers may be prioritizing building equity through homeownership rather than directing money toward retirement savings during their early years in Canada.

The report also found evidence that recent immigrant homeowners tend to carry larger mortgages and make higher monthly mortgage payments than comparable Canadian-born households.

What This Means for Newcomers Looking for Homes

The report offers an optimistic outlook to recent and prospective immigrants to Canada. While housing affordability remains a challenge, many immigrants are becoming homeowners within a few years of obtaining permanent residence.

Economic immigrants tend to achieve the best ownership outcomes, and newcomers living in more affordable provinces appear to reach homeownership faster than others.

So – for candidates aiming to get PR through programs like Express Entry and PNPs – the homeownership outlook is sunny, especially if you’re interested in living in a more affordable region!