Canadian immigrants are narrowing the homeownership gap with their Canadian-born counterparts, according Scotia Economics’ latest Real Estate Trends report released on Thursday.

The most recent census data available show that in 2006, almost 72% of immigrants lived in a dwelling owned by a household member, up from 68% in 2001. The comparable share for the Canadian-born population rose a more modest two percentage points over this period, from 73% to 75%.

“Homeownership tends to increase the longer one has lived in Canada, with the majority of new arrivals first settling in rental accommodation,” said Adrienne Warren, senior economist with Scotia Economics. “Over time, immigrant families eventually make the move to homeownership, at rates similar to the Canadian-born population. However, between 2001 and 2006, the homeownership rate rose for all immigrant groups, regardless of how long they had resided in Canada. The biggest increase was among those living in Canada for less than 10 years.

“As recent immigrants to Canada make the transition from renter to owner, they will increasingly drive housing demand,” added Warren.

The faster transition to homeownership has been supported in part by strong labour markets, the report suggests. The employment rate for core working-age recent immigrants jumped 3.5 percentage points between 2001 and 2006 (to 67%). This was faster than the 1.5 percentage point gain among their Canadian-born counterparts (to 82.4%). The employment rate for all immigrants also increased over this period, but by a more modest one percentage point (to 77.5%).

“The better labour market performance of recent immigrants may reflect a favourable skills mix, with many employed in high-growth industries such as engineering, construction and skilled trades. It may also reflect a greater geographic mobility to meet shifting regional labour requirements,” said Warren.

The report also states that, of the more than one million immigrants that came to Canada between 2001 and 2006, 69% settled in the three largest census metropolitan areas (CMAs) — Toronto, Montreal and Vancouver — and their surrounding municipalities. Meanwhile, a growing proportion (28%) of immigrants settled in smaller CMAs, most notably Calgary, Ottawa-Gatineau, Edmonton, Winnipeg, Hamilton and Kitchener. Less than 3% chose to live in a rural area.

“Given Canada’s aging population and relatively low fertility rates, longer-term household formation and housing needs will be largely determined by immigration,” concluded Warren. “Using standard assumptions regarding immigration, fertility and mortality rates, the share of Canada’s population growth coming from immigration could rise to three-quarters a decade from now, up from 60%-65% today and almost all by 2030. Most of this growth will be in Canada’s urban areas.”