Toronto’s sky-high real estate prices might have turned into a hurdle for the city’s growth. Statistics Canada (Stat Can) released its 2021 population estimates for Toronto this week. For the year ending July 1, most of the city’s growth was seniors. Last year was a bit of an anomaly, that’s true. It’s not a new trend, though. Seniors have managed to capture a greater share of the population for two decades. Annual growth for those over the age of 65 in Toronto really begins to soar after 2011.
Greater Toronto’s Population Added 15,924 People
Toronto CMA’s population growth slowed, but still advanced from the previous year. The population reached 6,572,524 people in 2021, up 0.2% (15,924 people). It was an odd year, where population growth reached the lowest level in the past 20 years. From an economic perspective, the demographics are more important than the quantity of people. Let’s break that down.
Toronto’s Working Aged Population Only Grew By 3,175 People
People between the ages of 15 to 64 are called the “working population” and are key to economic growth. Being in their prime working years, they pay most of a region’s taxes, and spend the most in the economy. This demographic reached 4,554,685 people in 2021, up 0.1% (3,175 people) from a year before. Public health restrictions and outflows to small cities weighed this number down significantly. It was the worst year for the rate of growth in at least two decades.
This also happens to be the demographic most important to real estate. Apparently that has little impact in a credit fueled frenzy.
Toronto’s Senior Population Grew 10x Faster Than Workers
Toronto’s seniors are where the vast majority of population growth is observed. The number of people over 65 years old reached 1,033,636 in 2021, up 3.3% (32,834 people) from the previous year. Seniors grew at a ratio of 10 to 1 compared to the working-age population. It’s obvious this is not a typical trend, and most definitely an anomaly. Annual growth for the senior population is usually multiples of the working-age population, though.
Toronto Annual Population Growth
The annual percent change of Toronto CMA’s population.
Source: Stat Can; Better Dwelling.
Toronto’s Senior Population Has Climbed For Two Straight Decades
Despite the unusual year, seniors outpacing the general population growth goes back decades. People aged 65 and older represented 15.7% of Toronto’s population in 2021. Rewind 20 years, and you’ll see that seniors were just 11.0% of people in Toronto. Since 2002, seniors have captured a greater share of the population.
Toronto Senior Population Share
The share of Greater Toronto’s population aged 65 or older.
Source: Stat Can; Better Dwelling.
Canada’s population is growing fast, but Toronto fails to attract (or keep) young-ish people. As the city’s home prices rise faster than wages, it’s a tricky value proposition. Toronto households get paid similar to other regions, but pay much more for homes. Even so, with an economy hyper dependent on real estate, it’s hard to see prices roll back in the near term. Ultimately, this can be a setup for systemic failure that becomes difficult to reverse.
Those seniors living in Toronto, much like Vancouver, the numbers may indicate that they have not yet sold their homes and have enough equity in their homes to ward off any increases in mortgage rates. And don’t mind shovelling snow to the other maintenance nuances. Then there is the promise that the home will increase in value during this time where money sitting in the Bank pays nothing. So why sell?
I’m not sure where new workers will find the money to buy these homes even if they’re able to receive an uninterruptible income (i.e. Government position). Like most of us, we hang on to the status quo until a decision is forced upon us. Ageing always brings clarity.
I would be curious to know if this trend is aligned (or not) with demographic trends both provincially (in Ontario), as well as pan-nationally? It may be easy to assert that the trend means that Toronto is having a hard time attracting or retaining working-age persons based on this trend, but how does it correlate with broader demographic trends? In my opinion, it would be a bad sign if this trend was out-of-step with provincial or national averages, since it then does indicate that despite being a hub of employment, the city / CMA can’t retain the working class it needs. But then again, the Bank of Canada has known that residential real estate costs started outstripping median incomes since at least the year 2000, so why is this a surprise now? Immigration, particularly where newcomers will be (primarily) dependent on local wages for their livelihood, certainly will not reverse this trend. Makes me wonder what the federal government’s goals are in respect of the latter.
Yeah you’d have to quadruple my salary to get me to go back to Toronto. Dealing with the traffic, insane housing, never ending stream of immigrants, terrible infrastructure was a nightmare.