Newcomers Close the Wealth Gap Via Housing | MyConsultant

Newcomers Close the Wealth Gap Via Housing

Families who were newcomers in 1999 have caught up to their Canadian-born counterparts in median wealth, according to Statistics Canada, but they rely more heavily on real estate investments.

The steady rise of real estate prices has helped immigrant families bridge the gap. Twenty years ago, the average major income earner of a Canadian-born family was 3.25 times wealthier than a comparable newcomer, and immigrant families were less likely to be homeowners. By 2016, newcomer families were approximately on par with Canadian-born ones in terms of home ownership, with 78.7% of newcomer families and 74% of Canadian-born families owning a residence.

There are some drawbacks for newcomers, however: the debt-to-income ratio tends to be higher in immigrant families than Canadian-born ones, and the recent dip in the real estate market is even more concerning for newcomer homeowners. Moreover, a greater tendency in immigrant families toward multi-generational households may also skew the data.

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