By Mata Press Service

Recent immigrants are making significant gains in Canada’s housing market, with some groups reaching homeownership rates close to or above those of Canadian-born residents within five years of becoming permanent residents.

But they are often paying more for their homes despite earning less, leaving many with heavier mortgage debt and fewer retirement savings, according to a new Statistics Canada report.

The study found homeownership rates among recent immigrants increased between 2018 and 2021 in Ontario, Nova Scotia and British Columbia, even as rates declined among Canadian-born residents in those provinces.

In Ontario, 40.2 per cent of immigrants in their fifth year after becoming permanent residents owned a home in 2021, up from 35.7 per cent in 2018.

During the same period, the homeownership rate among Canadian-born Ontarians aged 25 to 54 fell from 50.7 per cent to 47.8 per cent.

British Columbia followed a similar pattern. The ownership rate among immigrants in their fifth year rose from 33.4 per cent to 37.5 per cent, while the rate among Canadian-born residents slipped from 44.7 per cent to 43.3 per cent.

Statistics Canada said larger income gains among immigrants, combined with historically low interest rates during the first years of the COVID-19 pandemic, may have helped fuel the increase.

In Ontario, the median family income of recent immigrants climbed by $14,000, from $61,000 in 2018 to $75,000 in 2021. The median income of Canadian-born families rose by $2,000, from $107,000 to $109,000.

The findings are based on tax filers aged 25 to 54 who received permanent resident status between 2017 and 2021. The study covers Prince Edward Island, Nova Scotia, New Brunswick, Ontario, Manitoba, Alberta and British Columbia.

It does not include Newfoundland and Labrador, Quebec or Saskatchewan because comparable homeownership data were unavailable.

The report shows that location, immigration category and region of birth strongly influenced the likelihood of owning a home.

Recent immigrants living in the more affordable Maritime provinces and Manitoba were the most likely to close the ownership gap with Canadian-born residents.

By their fifth year as permanent residents, 56.6 per cent of recent immigrants in New Brunswick owned property, slightly higher than the 54.8 per cent rate among Canadian-born residents.

In Nova Scotia, the rates were 48.1 per cent for recent immigrants and 49.8 per cent for Canadian-born residents. In Manitoba, they were 47.9 per cent and 50 per cent, respectively.

The gaps were wider in Canada’s more expensive housing markets.

In British Columbia, 37.5 per cent of immigrants in their fifth year owned homes, compared with 43.3 per cent of Canadian-born residents. In Ontario, the figures were 40.2 per cent and 47.8 per cent.

Alberta recorded the largest gap among the provinces examined, with a fifth-year immigrant ownership rate of 39.7 per cent compared with 51.9 per cent for Canadian-born residents.

Economic-class immigrants were the most likely newcomers to become homeowners.

By their fifth year in Canada, 40.1 per cent of economic immigrants in British Columbia owned homes, close to the 43.3 per cent rate among Canadian-born residents.

The fifth-year rate among economic immigrants was 48.3 per cent in Ontario, 46.6 per cent in Alberta and 63.7 per cent in New Brunswick.

Family-sponsored immigrants generally had the second-highest ownership rates, while refugees had the lowest.

In British Columbia, 36.9 per cent of family-class immigrants owned a home after five years, compared with 10.4 per cent of refugees. In Ontario, the corresponding rates were 33.4 per cent and 19.6 per cent.

Major differences also emerged among immigrants from different parts of the world.

East Asian immigrants had the highest fifth-year homeownership rates in Ontario, Alberta and British Columbia.

In Ontario, 59.2 per cent of East Asian immigrants owned homes by their fifth year, compared with 51.4 per cent in British Columbia and 52.6 per cent in Alberta.

East Asia includes China, Hong Kong, Taiwan, Japan, South Korea, North Korea, Macao and Mongolia.

South Asian immigrants also recorded relatively high ownership rates. After five years as permanent residents, 50.9 per cent owned homes in Ontario, 46 per cent in British Columbia and 46.7 per cent in Alberta.

In Nova Scotia and New Brunswick, the fifth-year ownership rate among South Asian immigrants was about 53 per cent.

The picture was more uneven for Southeast Asian immigrants.

Nearly 60 per cent of Southeast Asian newcomers in New Brunswick owned homes by their fifth year, compared with 50.2 per cent in Manitoba and 37.8 per cent in Alberta.

The rate fell to 23.3 per cent in Ontario and 22.3 per cent in British Columbia.

Statistics Canada’s Southeast Asian category includes the Philippines, Malaysia, Singapore, Indonesia, Vietnam, Thailand, Myanmar, Cambodia, Laos, Brunei and Timor-Leste.

The report found that recent immigrants were buying more expensive properties than Canadian-born first-time buyers despite having lower family incomes.

In British Columbia, the median purchase price for a recent immigrant first-time buyer was $660,000, compared with $580,000 for a Canadian-born buyer.

The immigrant buyer had a median family income of $125,000, compared with $135,000 for the Canadian-born buyer.

That produced a home price-to-income ratio of 4.93 for recent immigrants and 4.35 for Canadian-born buyers.

Similar patterns appeared in the other provinces where sales information was available.

In Nova Scotia, recent immigrants paid a median price of $390,000, compared with $285,000 for Canadian-born buyers. Their median family income was $105,000, slightly below the $110,000 earned by Canadian-born buyers.

In Manitoba, immigrant first-time buyers paid a median of $340,000 on a family income of $90,000. Canadian-born buyers paid $295,000 on an income of $100,000.

Newcomers also appeared to be directing more of their available money toward housing and less toward retirement.

Only 16.8 per cent of recent immigrant first-time buyers in British Columbia contributed to a Registered Retirement Savings Plan during the year they bought their home. That compared with 36.1 per cent of Canadian-born buyers.

The gap was also substantial in Manitoba, where 28.4 per cent of immigrant buyers contributed to an RRSP, compared with 45.9 per cent of Canadian-born buyers.

Statistics Canada said the findings suggest many recent immigrants may favour building equity through a principal residence over investing in registered retirement plans.

Young immigrant homeowners also carried larger mortgages.

In 2023, the average outstanding mortgage debt among homeowner households headed by a recent immigrant younger than 35 was $450,000. The average among comparable Canadian-born households was $265,000.

Mortgage payments were also higher during the period examined. In 2021, recent immigrant households headed by someone younger than 35 paid an average of $1,920 a month, compared with $1,420 among Canadian-born households.

The report said the combination of higher home prices, larger mortgages and lower retirement contributions could leave immigrant homeowners more exposed to housing market declines, interest-rate changes and other financial shocks.

It also cautioned that the figures largely reflect conditions before Canada’s sharp increase in immigration after 2021 and before the Bank of Canada began raising interest rates in 2022.

For many newcomers, owning a home remains a powerful measure of economic security and successful settlement.

The new data show that immigrants are making rapid progress toward that goal. They are also taking on greater financial risks to get there.