A new report from Desjardins Group suggests that the middle-class dream of owning a home in Toronto or Vancouver may be coming to an end, as these cities increasingly resemble global hubs like New York, Sydney, and London.
"Canada has long defined middle-class success through homeownership," said Kari Norman, a senior economist at Desjardins, in a note on April 30. "Today that model is under strain, but not uniformly across the country."
Toronto and Vancouver are mimicking a "housing pattern already established in cities that serve as command centres of the world economy," Norman added. For many, renting is becoming the final stop in their housing journey, not a stepping stone to ownership, as the gap between home prices and wages widens.
Global city syndrome
Toronto and, to a lesser degree, Vancouver have succumbed to "global city syndrome," functioning as command and control centres for financial services, corporate headquarters, professional expertise, and international capital flows. Measures of urban globalization rank Toronto alongside Frankfurt and Chicago for its role in international finance, while the World Cities index considers Toronto a highly integrated "global node."
While global city status is often seen as positive, it comes with downsides. "Global city status is associated with persistent housing affordability pressures as compared to national norms," Norman said, noting that homeownership levels in these cities undercut national averages.
Price-to-income ratios soar
In London, New York, and Sydney, price-to-income ratios are higher than their respective national averages. In Toronto and Vancouver, the ratios are 12.9 and 10.7, respectively, well above Canada's average of 7.5 times the national income. Demographia, a research consultant, classifies cities with income ratios above nine as "impossibly unaffordable."
Desjardins noted that global cities often suffer from income disparity due to the concentration of highly paid professionals and lower-paid service workers. About 30 per cent of Canadians earn less than $40,000 per year, while under 10 per cent earn more than $70,000. In Toronto, those figures are 37 per cent and 18 per cent, respectively.
Homeownership rates decline
The upcoming 2026 census is expected to show further declines in homeownership rates in major Canadian centres, particularly Toronto and Vancouver. In London, 47 per cent of residents own their home compared with 62 per cent nationally, while in the New York-New Jersey area, the rate is 49 per cent versus a national rate of 62 per cent. In Toronto, 52 per cent owned their home in 2021, and in Vancouver, it was 49 per cent, compared to 67 per cent nationally.
