The Myth of Canada's Dying Suburbs

New data suggests the demand for suburban family-sized homes isn't disappearing anytime soon.

There’s a common belief that Canada’s suburbs are living on borrowed time.

The argument goes something like this: Baby Boomers will eventually sell or otherwise leave their large suburban homes, younger generations will increasingly prefer urban living, and newcomers to Canada will continue renting apartments downtown. If that’s true, the demand for family-sized homes could eventually fade, and home prices in the suburbs will crash and never recover.

But what if that assumption is wrong?

In this episode, Mike Moffatt and Cara Stern examine new Statistics Canada research on how immigrants’ housing choices change over time. While newcomers overwhelmingly rent when they first arrive, many transition into homeownership, especially suburban family-sized homes, as they establish themselves in Canada.

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They test this prediction by exploring the scenarios that could prove it wrong, from lower immigration and more urban family housing to rising emigration and changing housing preferences.

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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Cara Stern: There’s an assumption among some planners that suburban living is going to one day be a thing of the past in Canada—that people moving to Canada, who tend to start out in urban centres, are going to continue to want to live in urban areas, and whatever demand there is for suburbia will be outweighed by all the supply soon to hit the market from the aging of the baby boomers. Today, we’re breaking down why the classic Canadian suburb isn’t just surviving, but likely to be in high demand for decades to come.

Mike Moffatt: In a previous episode about whether aging Baby Boomers will flood the market with single-family homes, we talked about how the sheer number of newcomers will, in my view, ensure a strong demand for housing. However, what we didn’t cover is the type of homes that they’ll live in. If it turns out that newcomers to Canada have no interest in living in a single-detached home in the suburbs, then having robust immigration might not create a lot of demand for those suburban homes, at least not directly, though it could have an indirect effect.

Cara Stern: Most immigrants arrive in Canada and settle in a handful of regions in the country, and they tend to start off as renters. I mean, when you’ve got policies like the foreign buyers ban, it makes it incredibly challenging, if not outright legally impossible, for a newcomer to buy a piece of property the second they step off their plane. So it takes time for them to settle in and for them to be confident about where they want to set roots.

Mike Moffatt: But we actually have a lot of evidence that we can draw from to answer these questions.

A 2025 study from Statistics Canada called Housing Use of Immigrants and Non-Permanent Residents in Ownership and Rental Markets helps us answer these questions. It finds that for every 1,000 immigrants who just arrive in Canada, they occupy 320 homes. Of those 320 homes, 270 are rentals and only 50 are homes that they actually own. So they don’t occupy that many homes, and the homes that they do occupy are almost entirely rentals.

Cara Stern: That makes a lot of sense because renting gives you a lot of flexibility. Until you figure out where you want to be for the long term, it does make sense to rent for a while.

Mike Moffatt: Exactly. Qualifying for a mortgage can be incredibly difficult when someone first arrives, so of course they’re going to rent. But over time, that changes. As newcomers stay in Canada longer, they integrate into the economy, they build wealth, and they not only shift from rental to ownership, but they become less likely to live in overcrowded conditions—so they occupy more homes. Take those thousand immigrants: once they’ve been in Canada exactly ten years, they occupy 370 homes instead of 320. That’s more than before, but the breakdown changes a lot—it shifts to 150 rentals and 220 ownership homes. So there’s a big shift from rental to ownership.

Cara Stern: Yeah, that’s a huge shift from their first days in Canada to buying. They’ve set up their lives here and started working, making it easier to qualify for a mortgage, so it makes sense that we’d see a big movement at that point.

Mike Moffatt: And those changes don’t stop after ten years; they continue to get stronger. For immigrants who have been here for 15 years, they occupy a greater proportion of homes per thousand. In fact, they occupy more homes per thousand people than the Canadian-born population, and they also occupy a greater proportion of ownership homes. So by year 15, there is a lot of demand and a lot of purchasing of homes that they can own.

Cara Stern: So they’re actually more likely to own a home in Canada than someone born in Canada?

Mike Moffatt: I know that sounds strange, but it’s largely a function of the age distribution of immigrants to Canada. If you think about it, children don’t own homes and they don’t have their name on the lease. Because there’s a smaller proportion of children who arrive as newcomers relative to the general population, immigrants are more likely to be adults than the general population, and therefore are more likely to own or rent a home.

That’s something that we often miss in the immigration discussion. It sounds obvious, but it’s really important when it comes to housing. When we look at immigration, it’s not just a sheer numbers thing of 380,000 newcomers, but what’s also important is the fact that those newcomers are disproportionately in their 30s or late 20s. They’re in their prime rental and ownership years, which impacts the overall demand for housing beyond just the sheer number of newcomers.

Cara Stern: Ownership can mean a lot of different things. That could be a 500-square-foot, one-bedroom condo in downtown Toronto or Vancouver, or it could be a five-bedroom home in the suburbs. Those numbers about how many they own doesn’t actually tell us what they own. Do we know what they’re buying compared to the Canadian-born population?

Mike Moffatt: What we do know is that, per 1,000 persons, immigrants are more than twice as likely to live in a condo apartment that they own than the Canadian-born population. So it is true that they are more urban and more likely to be in a high-rise condo, but they’re actually slightly more likely to also own a ground-oriented home—think a single-detached, semi-detached, or townhome—than the general population.

It isn’t true that newcomers largely stay downtown and largely live in apartments. They might when they first arrive, but after 5-15 years, that changes. It’s also true that people who aren’t born in Canada disproportionately live in certain parts of the country, including suburban towns in the GTA or parts of suburban Vancouver like Surrey and Burnaby—places within these big metros that have lots and lots of single-family homes.

Cara Stern: That makes total sense if you look at the way immigrants have historically settled here and how cities have expanded. Think about the post-war Italian waves in the '50s and '60s moving outward, or more recently, the massive growth of Asian communities across Peel and York regions. A lot of them started downtown and then moved to the suburbs to establish their roots.

Mike Moffatt: Exactly. We’re still seeing that today. When the next census data comes out, we’re going to see a number of communities that haven’t historically been thought of as destinations for newcomers show very substantial increases in the population of people who weren’t born in Canada. Ones that instantly come to mind are Brantford and Woodstock in Southwestern Ontario. Beyond the borders of the GTA, over the last five to ten years, places have experienced an influx of folks who may have moved to Canada 10 or 15 years ago and are starting to settle in what have essentially become very distant suburbs of the GTA.

Cara Stern: Even those distant suburbs have home prices that aren’t particularly cheap. I suspect that most people who do move here have to have a certain amount of wealth to get approved to immigrate. How much does that explain what’s going on?

Mike Moffatt: The immigration pathway that someone takes actually does make a big difference in the types of homes that get purchased, affordability, and so on.

A study from Statistics Canada called The Homeownership Trajectories of Recent Immigrants shows that homeownership rates for economic-class immigrants, unlike the general population, are going up in Ontario. Despite having lower incomes initially, recent immigrants on average buy more expensive homes than Canadian-born people. But that’s just economic-class immigrants. If immigration shifts more toward lower-income, lower-skilled workers or refugee resettlement, that could change the calculus somewhat and you might not see as much demand for the suburbs.

As it stands right now, if we add all of this together, the belief that the death of the Baby Boomers means the death of the suburbs is not just wrong, but actually dangerously wrong. Now, there are pockets of the country with low levels of immigration where this might hold. Towns might depopulate, reducing the price of suburban homes there. But even there, the availability of homes might end up attracting families from other parts of Canada due to that relatively affordable housing. So even in those communities, I don’t think it’s a given.

Cara Stern: One thing that you’re insistent on here at The Missing Middle is that if we make a prediction, we should think through all the reasons why that might be wrong, and then think about how plausible those reasons are so we can adjust our predictions accordingly. So I’m going to give you some scenarios that would cause your prediction that large suburban family homes will still be in demand to be wrong, and you can tell me how plausible you believe them to be.

Mike Moffatt: Okay, yeah, I’m absolutely game.

Cara Stern: Let’s start with the most obvious lever: the overall numbers. What happens if our immigration rates drop significantly, or if Canada simply can’t hit its targets moving forward as the whole world starts trying to attract people as they all deal with aging populations? That could change things, right?

Mike Moffatt: That would make a difference. Now, I don’t think Canada is going to have any trouble hitting immigration targets for the next few decades. Keep in mind that the people who come over to Canada tend to be in their late 20s and early 30s, so there’s kind of a 30-year lag between reduced global births and reduced global immigration. That could have an effect 30 years from now, but I don’t think it’s going to be an issue today.

However, I could absolutely see a scenario where Canadians demand further cuts to immigration targets because of concerns around housing or healthcare, and governments respond to it. Currently, Canada brings in about 380,000 permanent residents a year. If that was to drop to 80,000 or 180,000, yeah, I would be a whole lot less bullish on the future of the suburbs.

Cara Stern: Okay, so scenario two: what if our cities actually get their act together and start building large family-sized homes within existing urban boundaries? I’m talking about high-density infill, multiplexes, townhouses, or those European-style courtyard apartments where kids can play in a safe area in a shared backyard. If young families and newcomers can get three or four bedrooms downtown, do they still choose the suburbs?

Mike Moffatt: I certainly hope that governments will allow for more infill housing. A lot of the work we do at the Missing Middle Initiative is writing reports and discussing policy changes to advance that in a way that doesn’t attract too much local opposition. But I’m also skeptical that governments will allow for enough infill at scale to have a measurable impact on existing suburbs. We’re trying our best, but as someone who works on these policies every single day, I’m aware of how difficult this is going to be.

Of course, it’s also possible that governments change course and, instead of allowing for more infill, they allow cities to build outward—significantly expanding urban growth boundaries to allow a lot of new suburbs to be created, which could make existing ones far less attractive. I’m skeptical that’s going to happen, particularly in the Lower Mainland of B.C. and Southern Ontario, but that’s certainly possible as well, and that would put downward pressure on the prices and the shortage of suburban homes in those areas.

Cara Stern: Okay, so here’s a third scenario: what if that pent-up demand from young, Canadian-born people that we’re counting on just evaporates? Maybe they resign themselves to the fact that they’re never going to be able to afford a house, so they stay in an apartment forever. Or worse, we see a major brain drain where our youngest, brightest talent looks at Canadian real estate prices and decides to leave the country.

Mike Moffatt: I worry about that emigration scenario a lot. In fact, I recently had a piece in The Globe and Mail that talked about this. If the suburbs do end up dying, I think it’s actually going to be for emigration reasons, not immigration ones. Emigration out of Canada is on the rise, and I think the conditions are right for a small-scale exodus of young people out of the country—not just to the United States, but to places that are much less expensive, like Vietnam, Thailand, Costa Rica, and so on. If we saw that exodus of young people, that absolutely would put downward pressure on the demand for homes in the suburbs.

Cara Stern: Okay, fourth and final scenario: what if housing tastes are really just changing? What if both newcomers and young Canadians decide they actually prefer smaller, low-maintenance urban units, and choose to not have kids altogether because it’s too expensive or they just don’t want to? If the cultural desire for the suburban dream dies, then so does the demand.

Mike Moffatt: Yeah, I’m skeptical of this one. Part of what newcomers to Canada are chasing is the North American dream, and that involves ownership of a larger home with a backyard. We’ve seen this for generations, so it doesn’t strike me as particularly likely that their preferences would all of a sudden change. But if those preferences do change, and newcomers en masse decide that they aren’t interested in suburban homes, or that those suburban homes are perpetually out of reach, I don’t think they’d settle in apartments. I think they’d just stop coming to Canada altogether. That starts to loop back to your immigration scenario where maybe we can’t hit our targets.

Overall, I see that as unlikely. We’ve had decades of folks coming to Canada wanting to chase that North American dream of a larger home with a backyard, and I don’t see that changing.

Cara Stern: Okay, I just thought of a bonus scenario to throw at you. All the data you’re basing this on looks at how immigrants have acted historically and where they settled in the past, when the real estate market was a really good place to invest. I suspect a lot of people came here thinking, “I’m going to get into real estate; this is how I’m going to build my wealth in Canada.” Will that hold? People coming here now are looking at a market that isn’t the best place to make money, at least in the short term. Do we know that this data will hold up in the long run?

Mike Moffatt: Remember, we only know in retrospect that it was a good market. Go back to the 1990s and the first episode of our show on the book, “Boom, Bust, and Echo”. In the late '90s, everybody was saying you would be out of your mind to buy suburban real estate, that it would be the worst thing you could possibly do because the bottom was going to fall out of it. So obviously nobody was going to do that—and of course, they did.

Cara Stern: Of course, we only know in hindsight for sure what’s going to happen. But there was a long period of time, especially in the GTA where a lot of immigrants settle, where there was a narrative that real estate is going up, it’s a really great market, and you should put your money in there. The narrative seems to have changed right now, especially with condos. It seems like it’s not that same bullish party where people were expecting to make so much money. Narratives play a large role in people’s decisions.

Mike Moffatt: They do, but keep in mind that we could have said the same thing in 1997 when home prices were lower than they were a decade prior, and academic experts said home prices would never go up again. People believed that. But what changed was that prices started going up again. There’s a chicken-and-egg problem here where we tend to think prices go up after people believe they’ll go up, but it tends to be the opposite: prices go up first, and then people believe they can make money there.

Since the end of World War II, the real estate market has had its ups and downs, but the one consistent thing is that people want a place to live. At the end of the day, they’re looking for that security. If you’re a newcomer to Canada, you want this home at some level; yeah, you want the price to go up, but regardless of what happens to that price over 10, 20, or 30 years, you still have the house and you can still live there. If the asset devalues, it still has the same usefulness to house your family.

I’m old enough to have lived through several cycles where people believe home prices always go up, then they fall and people say, “Oh my god, we were so naive, we’ll never make that mistake again,” and then we make that mistake again. I don’t see it as particularly likely that people are going to avoid moving to suburban homes because they think they won’t appreciate in value over 10, 20, or 30 years. It’s possible, but I don’t see it as particularly likely.

Cara Stern: I guess what we can count on is that people will continue to not necessarily be logical or rational about their investment decisions, especially when it involves a home. People come into it in a way where you can look at all the logic and fundamentals, but in the end, a big part of it is just an emotional decision.

Mike Moffatt: Well, on top of that, I feel like the general public talks out of both sides of its mouth. We say, “Housing shouldn’t be an investment,” and then when people make a decision that isn’t investment-based—like saying, “I just want a suburban home because I want my kids to be close to a school and I want a backyard”—we say, “Ha ha, that’s a foolish investment!” So it feels like sometimes you can’t win. We don’t want people to treat housing as an investment, and then when they decide not to, we mock them for their decision.

Overall, I wouldn’t say it’s rational or irrational; I would say that the heart wants what it wants. If somebody wants a suburban home, they’re probably going to go out and get it regardless of whether they think it’s going to go up 8% a year over the next 20 years or 2% a year.

Cara Stern: I think the message from this episode is that it’s all going to come down to people’s desires. What planners and policymakers should be doing is not looking at where people are living right now, but looking at where people aspire to live and planning accordingly.

Thank you so much for watching and listening. Our producer is Meredith Martin, and our editor is Sean Foreman.

Mike Moffatt: And if you have any thoughts or questions about past generations learning that home prices don’t always go up, please send us an email to [email protected].

Cara Stern: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Housing use of immigrants and non-permanent residents in ownership and rental markets

The homeownership trajectories of recent immigrants

Brought to you by the Missing Middle Initiative