SFU research links rising mortgage reliance to widening housing inequality
A new study from Simon Fraser University reveals widening inequality in home ownership across Canada, as younger generations and lower-income households struggle to enter or sustain a place on the property ladder.
The study, led by researcher Yushu Zhu, examined census data spanning from 1986 to 2021 across five major metropolitan areas: Montréal, Toronto, Calgary, Edmonton, and Vancouver. While home ownership in Canada improved steadily between 1991 and 2011, that trend has since reversed. By 2016 and 2021, ownership rates had dropped, and gains were increasingly driven by mortgage debt, not outright ownership.
“The probability of an average Canadian household owning a home improved steadily from 1991 to 2011, then dropped in 2016 and 2021,” the researchers found. “The likelihood of owning with a mortgage substantially increased.”
Rise of mortgage dependency
This reversal in ownership progress coincided with Canada’s shift toward housing financialization in the 1990s, according to the study.
As federal support for social housing declined, the government commercialized the Canada Mortgage and Housing Corporation (CMHC) and expanded mortgage securitization programs, boosting access to credit but also increasing reliance on debt to achieve ownership.
While mortgage liberalization made ownership more accessible for some, it didn’t work equally for all. Many low-income households, gig workers, and racialized Canadians continue to face barriers in accessing credit or securing a mortgage.
“The increased access to mortgages does not benefit everyone… racialized people are more likely to be denied access to credit due to discrimination,” the study noted.
Income and generational gaps widen
The research highlights a generational divide in home ownership. While all age groups saw improvements until 2021, those under 45, particularly Millennials and Gen Z, have experienced steady declines in ownership rates. At the same time, older Canadians are carrying mortgage debt deeper into retirement.
Between 1986 and 2021, the share of 55-64-year-old homeowners with a mortgage increased from 24% to 40%. For those aged 65-74, that share rose from 10% to 26%.
This suggests many Canadians are now relying on larger loans and longer amortization periods, raising concerns about financial stress as retirement nears.
Read next: New housing minister's comments shine a light on Canada's affordability crisis
While the top 20% income group saw increased home ownership between 2011 and 2016, ownership rates for other income groups stagnated or declined. Interestingly, while the lowest income group saw the fastest growth in mortgaged ownership, they remain the least likely to qualify due to financial constraints and systemic barriers.
Meanwhile, mortgaged homeowners in the bottom 50% of income earners have seen housing costs rise 25% faster than their income, compared to just 5% for higher-income households.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
