Toronto turns into a retirement village as the elderly population explodes

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Toronto’s exorbitant real estate prices may have turned into an obstacle to 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 in the elderly. Last year was a bit of an anomaly, it’s true. It’s not a new trend, however. The elderly have managed to capture a larger share of the population over the past two decades. The annual growth of people over 65 in Toronto really starts to skyrocket after 2011.

Greater Toronto population added 15,924 people

Population growth in the Toronto CMA slowed, but still increased compared to the previous year. The population will reach 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 last 20 years. From an economic point of view, demography is more important than the quantity of people. Let’s break this down.

Toronto’s working-age population grew by just 3,175 people

People between the ages of 15 and 64 are called the “working population” and are essential to economic growth. Being in their prime working years, they pay most of an area’s taxes and spend the most in the economy. This demographic group reached 4,554,685 people in 2021, up 0.1% (3,175 people) from the previous year. Public health restrictions and outings to small towns have weighed heavily on that number. It was the worst year for the growth rate in at least two decades.

This also happens to be the most important demographic group for real estate. Apparently that has little impact in a credit-fueled frenzy.

Toronto’s older population has grown 10 times faster than workers

Toronto’s seniors are seeing the vast majority of population growth. The number of people over 65 reached 1,033,636 in 2021, up 3.3% (32,834 people) from the previous year. The elderly increased at a ratio of 10 to 1 compared to the working age population. Obviously, this is not a typical trend, and most certainly an anomaly. However, the annual growth of the elderly population is generally a multiple of the working-age population.

Annual population growth in Toronto

The annual percentage change in population of the Toronto CMA.

Source: Statistics Canada; Live better.

Toronto’s senior population has climbed for two consecutive decades

Despite this unusual year, the number of seniors outpacing general population growth dates back decades. Seniors aged 65 and over made up 15.7% of Toronto’s population in 2021. Go back 20 years and you’ll see that seniors made up only 11.0% of Toronto’s population. Since 2002, older people have made up a larger share of the population.

Share of Toronto’s senior population

The share of the GTA population aged 65 or older.

Source: Statistics Canada; Live better.

Canada’s population is growing rapidly, but Toronto is failing to attract (or retain) young people. As city home prices are rising faster than wages, this is a tricky value proposition. Households in Toronto are paid as in other regions, but pay much more for houses. Even so, with an economy hyper-dependent on real estate, it is difficult to see prices falling in the short term. Ultimately, this may be a setup for a systemic failure that becomes difficult to reverse.

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