1.9 Million – that’s the number of new permanent residents that Canada plans to welcome between 2022 and 2025. In this post, we’ll be discussing Canada’s immigration targets and its effect on supply and demand within the Canadian housing market.
As you probably already know, our country has been dealing with a supply shortage.
Of all the countries in the G7, Canada comes in with the fewest housing units per 1000 people which equates to a shortage of about 1.8 Million homes. We’re also the #1 nation in the world where people would most like to live.
As of January 2023, Stats Canada estimates that our population is over 39 Million people and that number won’t be getting any smaller.
The Canadian government has lofty immigration targets over the next 3 years. This includes: 465K new permanent residents in 2023, 485K in 2024, and 500K in 2025. When you couple this with strong demand from millennials who already live in Canada, the future of the Canadian housing market is going to remain strong.
According to a Royal LePage survey among those aged 25-35, 4 Million Canadian millennials plan to purchase a home over the next 5 years and the supply-demand imbalance is going to continue to keep housing prices up.
With more immigrants coming to Canada, lack of supply continues to be a concern. It’s one reason that the Canadian housing minister told Global News in an end of year interview that its quite ironic that Canada needs to welcome immigrants who are skilled tradespeople who can help us build more homes.
Although new permanent residents may not immediately impact demand in the residential re-sale market while they get established, within a few years they will certainly be looking to enter the housing market
In the short term, rental demand will continue to be strong given the large number of new arrivals.
According to U.S News Global Survey, Canada is the best country to start a career – in fact, at 60.2%, the vast majority of Canadian immigration is for economic factors, more than 4 times that of the United States
Canada is also the world’s 3rd leading destination for international students. In 2021 alone, there were 621K students studying in Canada from abroad. These individuals contribute $22B annually to our economy and may very likely be looking to live and work here after they obtain their degree
On Forbes Global liveability index, Canada has 3 cities that rank in the top 10 for best places to live, including Toronto, Vancouver and Calgary. The City of Ottawa ranked #7 in the world for work-life balance according to a survey from Kisi which examined over 130 data points. This included factors such as work intensity, city livability, mental health care, outdoor spaces and much more.
The bottom line is this: people from abroad want to move to Canada and this will continue to put pressure on our housing market. Canada added over a half a million new jobs over the past year and 104,000 last December, which exceeded expectations – many of these are good quality jobs as well, requiring a university level education.
Wage growth has also been on the rise and over the past 3 years, average weekly earnings in Canada have gone up by 12%. High paying jobs and good employment benefits make us an attractive option for those looking to raise a family.
Over the next several years, Canada plans to significantly bolster immigration in order to strengthen our economy. It’s clear that the Canadian housing market is going to remain strong.
Between first time millennial homebuyers and rising immigration, the need for entry level properties will be in high demand.
According to the Royal LePage 2023 Market forecast, the aggregate housing price in Canada is expected to drop by just 1% year over year, despite high interest rates and increased cost of living.
We remain hopeful that with interest rates steadying as the year progresses, this stability will prompt buyers and sellers to feel comfortable entering the market.
It was also recently announced that in December Canada’s inflation rate eased to 6.3%, it’s lowest level since February of last year. Perhaps this signals a busy spring market ahead.
If you have any questions about buying, selling or would like to chat about the Ottawa market, please don’t hesitate to reach out or visit our homepage to learn more about how we can help you achieve your goals.