Home prices doubled in 10 years, far outpacing population growth in Ontario

While some politicians blame housing price increases on population growth — a new report finds there are many other factors, particularly in Ontario.

Canada’s population surpassed 40 million for the first time in 2023, Statistics Canada noted in June. Canada’s population has already exceeded 41 million in 2024 and is projected to reach 62.8 million people by 2073, according to Stats Can.

Population growth historically leads to increased housing demand, which in turn contributes to a rise in home prices, real estate brokerage Zoocasa noted in a new report.

Partly for this reason, and wider economic concerns, the Canadian government recently announced plans to reduce the number of permanent residents allowed into the country in 2025 and 2026, cutting the intake by 21 per cent, Zoocasa noted.

Looking at population and home prices for each province, Zoocasa found home price growth far outpaced population increases in most provinces.

“Population growth is often linked to driving home prices up,” Zoocasa said in the report. “However, with prices rising at much faster rates than population growth, it is likely that other factors—such as interest rates, housing availability, shifting demand, government policies, and economic conditions—are also at play.”

Zoocasa analyzed population records and provincial benchmark home prices for the past 10 years using Statistics Canada and the Canadian Real Estate Association data. Manitoba was excluded from this report benchmark home prices were not available in that province.

The report found home prices increased by over 100 per cent in Ontario, Nova Scotia and Prince Edward Island. Quebec, New Brunswick and British Columbia were just under 100 per cent increases.

Population increases, however, were much more modest at 20.9 per cent in British Columbia, and 18.4 per cent in Ontario.

Ontario’s population has been steadily increasing since 2014 but home prices started to increase rapidly in 2020, Zoocasa noted.

Following the pandemic, ultra-low interest rates brought on a huge uptick in housing demand, which increased the benchmark price by 13.48 per cent from 2019 to 2020, and by 25.4 per cent from 2020 to 2021.

During the same period following the pandemic, population growth slowed. From 2019 to 2020, the population increased by 1.29 per cent, and from 2020 to 2021, it increased by only 0.55 per cent.

Over the past three years, benchmark home price growth has slowed while population growth has accelerated, the report noted.

From 2021 to 2022, Ontario’s population grew by 2.01 per cent, with benchmark prices rising slightly more at 2.41 per cent.

However, between 2022 and 2023, the population increased at a faster rate, up 3.16 per cent, while benchmark prices edged up by just 1.21 per cent. Most recently, from 2023 to 2024, Ontario’s benchmark home price declined by 4.05 per cent, while the population continued to grow by 3.2 per cent.

“So while population growth does play a role in driving housing demand, it isn’t the sole factor behind the rapid rise in Ontario’s housing prices, particularly as some Ontarians move to other provinces,” the report noted.

See the full report here.