housing
UNEQUAL EQUITY ACCUMULATION
Mortgage-free equity is an important driver of Canadian housing markets, and is itself driven by much more than the size of regional populations.
It’s important to remember that the ownership housing market is driven by not just incomes, but also equity (and wealth). And while it’s difficult to measure the exact amount of equity within a housing market, we are able to measure the amount of mortgage-free equity (as we’ve discussed in past rennie landscapes). We noted in the last edition how much equity was being freed up in Metro Vancouver over the past decade to potentially be used in future transactions. This time, we look across markets to get a sense for how much mortgage-free equity there is in respective metro areas within Canada. Surprisingly, the size of the market isn’t the biggest determination of how much mortgage- free equity exists within that market. Sure, Toronto—Canada's largest metro area—has the most mortgage-free equity in Canada, per the 2021 census, at $648 billion. But second on the list is Metro Vancouver, Canada’s
third-largest metro. Montréal, meanwhile, has about half as much mortgage-free equity as Vancouver. The biggest difference, of course, is home values, where Vancouver’s average home is worth $1.4 million compared with Montréal’s $529,000. The share of households that are mortgage-free also play a part, as Vancouver’s 41% of mortgage-free households outpaces Montréal’s 35%. Kelowna, which is ranked 20th in Canada in terms of the number of owner households (and in population) has the 16th-highest amount of mortgage-free equity in Canada and is ahead of some much larger metro areas like Halifax and Saskatoon. Once again, home values play a big role, with the average price in the Central Okanagan of $817,000—that’s the sixth-highest of any CMA in Canada. Kelowna also has a high share of mortgage-free households, at 41%, that will be influencing the housing market for years to come.
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