The housing experiences of new Canadians: Insights from the Longitudinal Survey of Immigrants to Canada (LSIC)

Executive summary

This report outlines several aspects of the residential experiences of recent immigrants to Canada. It uses the Longitudinal Survey of Immigrants to Canada (LSIC) to document the experiences of newcomers as they learn how to navigate Canada’s housing market. After describing the historical context of immigration in Canada in section one, section two elaborates on housing affordability, and how this varies by census metropolitan area, category of admission, country of origin, and visible minority status. Most analysis in section two is broken down by owners and renters. In section three, multivariate analysis is used to identify the factors that allow those that rented in wave 1 to become owners by wave 3. The report closes by discussing some policy implications and making some suggestions for future research.

Findings

By and large, the findings in this report suggest that immigrants settle in to the housing market very quickly, and although many face adversity in their early years, they appear to be determined to not let these hardships prevent their residential mobility. In fact, after only four years most have overcome affordability constraints they may have initially faced; many have even purchased a home, suggesting that they have also learnt how to navigate the mortgage and labour markets of Canada.

Section one of the report describes the LSIC and outlines the broad theoretical platform for understanding immigrant integration outcomes, like housing, in Canada. The work of early immigration and housing scholars is described, followed by a descriptive analysis of the housing experiences of immigrants in section two. For the most part, this section consists of a bivariate analysis of shelter costs by housing-relevant characteristics. Following this, a multivariate analysis of the determinants of homeownership appears in section three. The motivation for studying homeownership as an outcome in this section is that homeownership remains the most popular housing type in Canada, and as immigrants integrate into Canadian society, it is expected to be the accommodation type that they will gravitate towards. Consequently, attainment of homeownership represents an important milestone in terms of residential and socioeconomic mobility.

Conclusion

Overall, this study presents a fairly positive story for one cohort of immigrants to Canada. Although nearly all newcomers face significant affordability constraints at time of entry, most are able to secure affordable housing during the four-year observation period available in the LSIC. Over half of all people that remain in the sample own their homes after only four years. This level of progress is remarkable, and provides some affirmation that immigrants integrate into Canadian society at a rapid pace.

Although the broad storyline is positive for LSIC respondents, there are some trends that warrant closer attention in future research. First, affordability constraints appear to be acute for renters in Ottawa, and for homeowners in Toronto and Vancouver, and although the housing market has cooled somewhat in recent years, it is likely that a significant proportion of newcomers in these locations are dedicating more resources to housing than their counterparts in other parts of Canada. This is likely to be true for all new housing market entrants in these cities, and not just immigrants. Second, some visible minority groups also seem to have more difficulty in the housing market than others, with West Asians standing out as particularly hard-hit. When broken down by country of origin, it is Africans and those from the Middle East that face the greatest affordability constraints. There are also wide variations by category of admission, with refugees facing the greatest constraints.

One of the implications of this report is that although providing housing support and information to newcomers is probably important, it is immigrants themselves that are the primary reason behind improvements in housing outcomes. Rents (as a proportion of income) drop quickly for most groups, homeownership rates ascend quickly, and shelter costs (for many) quickly fall in line with other people living in the same census metropolitan areas. This suggests that most newcomers to Canada are ‘making it’, much like their predecessors did, in the largely-private Canadian housing market. That is not to say that there aren’t hardships for them regarding other aspects of integration (such as the labour market), but that, remarkably, integration into the Canadian housing market proceeds despite these other hardships. What is interesting, and ripe for future study, is elaborating on how more recent newcomers do this compared to previous arrival cohorts. Are they relying more or less on extended family connections? Entry wealth? The conventional mortgage market? Although this reports provides partial answers to these questions, much work remains to be done.

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