The Future of Housing Occupancy: Toronto CMA

Demographic Growth & Change

Over the past 17 years, the Toronto CMA’s population has grown by nearly 1.77 million residents, or by 42 percent. Annual population growth has ranged between 1.5 and 3.1 percent since 1996, with strong growth characterizing the early-2000s followed by relatively moderate growth through the balance of that decade. More recently, growth rates have declined slightly, with the CMA’s population growing by 1.5 percent between 2012 and 2013.

In considering future trends in aging, mortality, fertility and migration, the Toronto CMA’s population is projected to grow by 47 percent by 2041, with the region welcoming 2.81 million net new residents over the next 28 years. This would bring the CMA’s population up from 5.96 million people in 2013 to 8.77 million by 2041. 

In annual terms, population growth would inch up towards 1.6 percent through the early-2020s and then fall back towards the 1.0 percent level by 2041. This pattern of slowing growth over the longer-term is driven predominantly by the aging of the existing population both into the higher mortality stages of the lifecycle and out of the  prime childbearing ages. A consequence of this phenomenon is that natural increase—the difference between the number of births and deaths each year—is projected to add only 17,000 residents to the regional population each year by 2041, less than half of what it is contributing today (36,000). 

With respect to projected changes in the composition of the Toronto CMA’s population, the older age groups will see the most significant growth. Each of the 55-plus age groups is expected to grow at a faster pace than the CMA’s population as a whole, with the 65-plus groups growing by more than twice the average rate. The under-55 groups, on the other hand, will all grow much more slowly. Shifts in the region’s demography will see the 65 and older population go from representing 13 percent of the Toronto CMA’s population in 2013 to 23 percent by 2041.

In considering this future outlook for the CMA, it is important to bear in mind that the aging of the region’s existing 5.96 million residents will, to a large extent, shape the composition of  tomorrow’s population. For example, 88 percent of today’s Toronto residents would be alive 2033, while 79 percent would still be around by 2041 and potentially still living in the region.

Housing Occupancy Demand by Structure Type

The Census and National Household Survey provide data on the age-specific pattern of housing occupancy. The distinct lifecycle pattern of housing occupancy in the Toronto CMA is considered here for two broad structure types: ground oriented (ranging from traditional single detached  homes to row houses and duplexes) and apartments. 

On the ground oriented side of the market a general pattern of increasing rates is seen, as youths move out of their parents’ homes and begin to form households of their own. The predominance of ground oriented accommodation is evident through the child rearing stages of the lifecycle and increases up to the age of 60. From this point onwards, ground oriented rates, while still greater than those for apartments, decline slowly, the result of some empty nesters and seniors moving into apartments, living with relatives, or transitioning into collective types of  accommodation. As with ground oriented accommodation, apartment maintainer rates also increase significantly in the younger age groups, with young adults exiting the familial home to form households of their own—this results in apartment rates increasing to 22 percent for those between the ages of 30 and 34 (versus 20 percent maintaining a household in a ground oriented unit). From here apartment maintainer rates decline into the 16 percent range during the family formation stages of the lifecycle before increasing again in the 60-plus age groups. Apartment rates continue to increase through the older stages of the lifecycle in the Toronto CMA and, interestingly, eventually surpass those of younger age groups: apartment rates in the CMA peak at 26 percent for the 80 to 84 population, compared to a maximum of 22 percent in the younger age groups. While apartment rates peak during the early-career age groups in some other CMAs, in Toronto rates are highest among the 75-plus age groups.

Combining trends in the lifecycle patterns of household maintainer rates by structure type with the pattern of demographic growth and change projected for the Toronto CMA between 2013 and 2041 would see private household occupancy demand grow by 1.24 million units over the next 28 years. The high maintainer rates that predominate through the older age groups will combine with rapid growth in these older segments of the population to see total housing occupancy demand in the Toronto CMA grow faster than the region’s population: put slightly differently, 47 percent growth in total population would result in 58 percent growth in total housing occupancy demand by 2041. Additional demand for ground oriented accommodation would total 744,122 net new units over the coming 28 years, with an additional 500,086 net new apartments also required to house projected population growth and change. 

Housing Occupancy Demand by Tenure Type

A distinct lifecycle pattern is also evident when household maintainer rates are considered by tenure. In the Toronto CMA maintainer rates for owned accommodation increase significantly through the family formation and child rearing stages of the lifecycle: from only three percent of people in the 20 to 24 age group owning their dwelling unit, maintainer rates increase four-fold, to 12 percent, for those aged 25 to 29 and then double to 24 percent for those aged 30 to 34.  Rates continue to increase up to the age of 55, where 43 percent of the Toronto CMA’s residents maintain a household in an owned dwelling unit. Maintainer rates for owned accommodation are relatively stable up to the age of 84, after which they decline to 37 percent. This is consistent with the decision by some older members of the population to move out of owner-occupied housing altogether, choosing to either move in with their children, move out of private owned accommodation and into collective care facilities, or sell their homes and move into rental housing.

With respect to the lifecycle pattern of rental maintainer rates, a significant increase is also seen in the post-secondary/labour force entry and early career/family-formation stages of the lifecycle. From a low of one percent for these youngest age groups, rental maintainer rates increase to where 18 percent of the 25 to 34 segment of the population maintains a household in a rented unit. Unlike in other CMAs, however, rental maintainer rates in the Toronto CMA remain relatively stable throughout the older age groups (after declining slightly through the family rearing stage of the lifecycle), ranging narrowly between 13 and 15 percent. In contrast, other CMAs see rental rates increase dramatically through the older age groups.

Given the predominance of ownership tenure throughout the lifecycle in the Toronto CMA, future additional occupancy demand for owned units is expected to far outweigh that for rented dwellings. For example, the owned segment of the market is expected to grow by 1.11 million units over the coming 28 years, growing from 1.48 million dwellings in 2013 to 2.58 million by 2041 (75 percent growth). The demand for rental housing is projected to increase by 138,792 units over the same period, going from 663,237 in 2013 to 802,029 by 2041 (21 percent growth).




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