Ontario Residents Moving Out of Province

It is estimated that nearly half of Canada’s population resides in Ontario. Many individuals flow into the province, especially into the Greater Toronto Area (GTA), whether for employment opportunities or newcomers to Canada seeking their cultural communities. This has led to a robust Ontario real estate market, with skyrocketing demand and lacklustre supply. Is it any wonder why the average price for a residential property here was selling for north of $1 million at the height of the pandemic-era boom? From the urban centres such as Toronto, Hamilton, and Ottawa to smaller markets like Guelph, Sudbury, and Peterborough, Ontario has plenty to discover – as the old car license plates touted.

But it seems that more households are waving goodbye to Canada’s most populous province in search of more affordable locations. With more young professionals enjoying the ability to work from home and pent-up savings from the COVID-19 public health crisis, which saw people staying home more and spending less, many Canadians are learning that there is life outside of Ontario.

Ontario Residents Moving Out of Province

Over the last couple of years, several studies and government data have revealed that many Ontario residents have or are planning to move out of Canada’s most populous province. The reasons vary, from a lack of affordable housing in the Ontario real estate market to a tremendous cost of living across the province, and this could persist moving forward.

In a July 2022 survey from LowestRates.ca, seven per cent of Ontarians say they planned to move out of the province within the next year, up from four per cent just two years before. Thirty per cent of respondents listed relocating to afford a home, while 22 per cent made the decision for lifestyle reasons.

A September 2023 study by the Ontario Real Estate Association found that more than 40 per cent of Ontario post-secondary graduates are considering leaving the province due to affordability challenges. For younger Ontarians, it is a mix of high student loan debt and out-of-reach home prices either to rent or purchase.

“Student debt is not merely a financial burden; it’s the biggest barrier to the Canadian dream of home ownership for many young Ontarians and their families,” said OREA CEO Tim Hudak in a statement. “Our research shows that the weight of student loans contributes greatly to the housing affordability crisis which, if left unaddressed, will lead to fewer young Ontario homeowners.”

This finding comes after it was revealed that approximately 14,000 people in their 20s left Ontario. In fact, overall, recent Statistics Canada data confirmed that people continue to leave Ontario for somewhere else in the country. Additionally, the numbers are higher in Ontario than in any other province.

“All provinces and territories recorded losses in their interprovincial migration exchanges in the third quarter of 2023 except for Alberta, which continued to have the highest net gains (+17,094) and New Brunswick (+21), with a very small gain,” a December 2023 population estimate report from the federal agency stated.

A Snapshot of the Ontario Real Estate Market

In February, the average price of resale residential properties climbed 1.3 per cent year-over-year to $873,207, according to new OREA figures. When you zoom in on Toronto, the average selling price in North America’s fourth-largest city edged up 1.1 per cent to just below $1.109 million. By comparison, the national average price surged at an annualized pace of 3.5 per cent to $685,809.

The good news is that there is more housing supply in the Ontario housing market. New residential listings were 4.7 per cent above the ten-year average, while active listings were nearly five per cent above the decade average for the month of February. Months of inventory, which gauges the number of months it would take to exhaust current housing stocks at the present rate of sales activity, were 2.6. The long-run average is 2.3 months for this time of the year.

New housing construction activity has also been robust. According to Canada Mortgage and Housing Corporation (CMHC), housing starts exceeded 12,000 units in the first two months of 2024, up close to five per cent from the same span a year ago.

In Ontario and the rest of the Canadian housing market, prospective homeowners are still contending with “very challenging affordability conditions.”

“Anyone expecting smooth sailing ahead for the housing market got a reality check in February,” said Robert Hogue, an economist with Royal Bank of Canada, in a research note. “This up-and-down pattern could be a sign of things to come, as interest rate uncertainty and poor affordability keep buyers and sellers on their toes for the next while.”

The good news, says Hogue, is that Toronto home prices are unlikely “to take off” and are “most likely to stay largely flat in the near term.”

Will this be enough to reverse the population exodus that has transpired in Ontario since the pandemic? The Ontario government is optimistic, especially as the population climbed 3.4 per cent last year, even as it lost more than 36,000 residents to other provinces.

What Queen’s Park Forecasts

The Province of Ontario recently published a report that assesses population projections from the base year of 2022 to 2046. The expectations were rather rosy. Ontario’s population is projected to grow by nearly 44 per cent, or approximately 6.6 million, over the next 24 years to 21.7 million.

“The provincial population is projected to grow rapidly in the short term, increasing at an annual rate of 3.2 per cent in 2022–23, 2.7 per cent in 2023–24, and 2.1 per cent in 2024–25. Thereafter, the rate of growth is projected to ease over time, reaching 1.3 per cent by 2045–46,” the report stated. “Net migration is projected to account for 85 per cent of all population growth in the province over the 2022–2046 period, with natural increase accounting for the remaining 15 per cent.”

Indeed, Canada’s population growth accelerated in 2023 as the country witnessed the fastest growth rate in decades. Statistics Canada announced in a March 2024 report that the nation’s population expanded faster last year than any other period since 1957, fuelled by the explosion in temporary residents.

The challenge for Queen’s Park will be accommodating the growth in people. The CMHC projected that Ontario will be short by about 1.5 million homes by 2030 as housing starts are predicted to be roughly 80,000 annually for the next three years.