Is household formation peaking in Canada's hottest real estate markets?

Is household formation peaking in Canada's hottest real estate markets?

Is household formation peaking in Canada

The epicentres of household growth will likely shift soon from Ontario and British Columbia to the Prairies, according to projections by Canada Mortgage and Housing Corporation using data from Statistics Canada.

Not even the pandemic will derail this increase, Better Dwelling said in its analysis of the StatsCan figures.

“Even by the slowest measure, a rise in household formation is expected,” Better Dwelling said. “However, traditionally high growth markets should begin to peak right around now. Replacing them as growth leaders are places with younger families.”

StatsCan numbers indicated that over the next two decades, the country will see between 2.4 million and 4.7 million new households, with the peak increase likely to be seen this year due to “a spike in international migration.”

“From there on, it should decline due to an aging population and lower fertility rates,” Better Dwelling cautioned.

The analysis added that Ontario and B.C. have in fact already passed this peak, and that population growth in the Prairies will have multiple factors working in its favour.
“A combination of higher growth of family-aged demographics should give a natural boost,” Better Dwelling said. “Strong interprovincial migration is also seen adding to the trend. The populations in these regions are also smaller, so it’s also easier to see bigger growth. [CMHC] projects this trend will be particularly strong in Alberta.”