The Future of Housing Occupancy: Ottawa-Gatineau CMA
Demographic Growth & Change
The Ottawa-Gatineau CMA grew by 25 percent between 1996 and 2013, going from 1.05 million to 1.30 million residents through the addition of 258,976 people. Over the early part of this period, the annual rate of population growth increased from 0.7 percent to a high of 2.1 percent in 2001, before declining to 0.6 percent by 2006. In spite of the post-2009 global economic slowdown, the population growth rate in Ottawa-Gatineau remained in the range of 1.2 to 1.8 percent between 2006 and 2013.
Looking forward, and accounting for trends in aging, mortality, natality and migration, the Ottawa-Gatineau CMA’s population is projected to grow from its current 1.30 million residents to 1.45 million by 2023, 1.56 million by 2033, and 1.63 million by 2041. As in other Canadian CMAs, annual rates of population growth are expected to decline over time, as they respond to the moderating of migration and a general demographic shift, as the region’s residents age out of the childbearing stages of the lifecycle and into the higher mortality age groups. By the mid-2020s, annual population growth is expected to fall to 0.9 percent, declining further to 0.5 percent by 2041.
While the region may grow more slowly in the coming years, the age composition of the Ottawa-Gatineau CMA’s population will change significantly, with the greatest relative increases coming to the 65 and older age groups. All groups aged 65-plus will grow faster than the CMA average between 2013 and 2041, with this segment of the population adding 213,732 residents, thereby raising their share of total population from 13 to 24 percent. As a result, growth in the 65-plus age groups would account for 65 percent of the region’s 326,676 net additional residents to 2041, one of the highest proportions among Canada’s major CMAs.
The aging of Ottawa-Gatineau’s current population, perhaps even more so than for some other CMAs in Canada, will contribute substantially to tomorrow’s demographic changes. For example, long and increasing life expectancies would see upwards of 87 percent of today’s residents still alive in 2033 (and potentially living somewhere within the region), while 77 percent of those residents would still be alive by 2041.
Housing Occupancy Demand by Structure Type
Census and National Household Survey data can be used to illustrate the lifecycle pattern of housing occupancy for the Ottawa-Gatineau CMA. For example, the preference for ground oriented housing grows through early adulthood and predominates through the family formation and family rearing stages of life, before declining though the older age groups as apartments and collective/institutional accommodation become increasingly attractive. While apartments are also important through the young adulthood stages of the lifecycle (as youths move out of the parental home), maintainer rates are lower than for ground oriented housing through the family rearing stages, the result of growing families and, by extension, space requirements. Once the age of 55 is reached, however, maintainer rates for apartments begin to increase, reaching a peak of 26 percent of people aged 80 to 84 in the region maintaining a household in an apartment.
Combining trends in the lifecycle patterns of household maintainer rates by structure type with the pattern of demographic change in the CMA between 2013 and 2041 results in a demographically-based projection of total housing occupancy demand growing by 170,208 units over the next 28 years. High maintainer rates among the rapidly-growing older age groups will result in total housing occupancy demand outpacing population growth: 25 percent growth projected for the population as a whole would translate to a 32 percent increase in total housing occupancy demand in the Ottawa-Gatineau CMA between 2013 and 2041.
Given the lifecycle patterns of maintainer rates, future occupancy demand in the Ottawa-Gatineau CMA will be weighted towards ground oriented formats, with 113,449 new units required to accommodate projected growth and change versus 56,760 apartment units. The greatest relative growth, however, would be in the apartment segment of the market, with apartment occupancy demand growing by 37 percent versus a projected 30 percent growth in the demand for ground oriented units over the coming 28 years.
Housing Occupancy Demand by Tenure Type
The lifecycle pattern of household maintainer rates by tenure also corresponds with major life milestones, from leaving the familial home while attending school, to moving out to enter the labour force and potentially beginning a family, to up-sizing as one ages through middle stages of a working career and raising a family.
For instance, while maintainer rates for both owned and rented units increase significantly through early stages of the lifecycle, increases for the ownership side of the market continue through the 30 to 34 age group, a pattern consistent with the need to build sufficient savings and income to meet the financing requirements associated with buying a home.
Through the older stages of the lifecycle owned maintainer rates begin to decline (into to the 43 to 45 percent range for the 70 to 84 age groups) as some seniors decide to move out of owned accommodation altogether, either moving in with their children, moving out of private owned accommodation towards collective care such as nursing homes or hospitals, or by selling owned homes and moving into the private rental accommodation.
Rental maintainer rates in the Ottawa-Gatineau CMA rise from lows of one percent in the 15 to 19 group to peak at 25 percent in the 25 to 29 year old age range. From here, rates stabilize in the 14 to 16 percent range through the 35 to 65 age groups. Increases in rental rates in the 70-plus age groups are consistent with the declines seen in owned maintainer rates through this stage of the lifecycle.
Looking forward, the strong predominance of owned accommodation throughout most of the lifecycle would result in the demand for owned units outpacing that for rented dwellings. More specifically, the owned segment of the Ottawa-Gatineau market is projected to increase by 40 percent between 2013 and 2041, going from 361,480 to 505,234 units over this period. The demand for rental housing is expected to increase by a much lower 16 percent, from 169,525 units in 2013 to 195,978 by 2041. Hence, an additional 143,754 owned units and 25,454 net new rental units would be required to house the region’s future residents between 2013 and 2041.
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