Mark it in our calendars: Today, June 16, 2023, is a historical day. For the first time ever, Canada has crossed the 40 million person population as we continue to set new immigration records for our country. In recent years we have been witnessing a significant increase in immigration with people from all around the world choosing to make Canada their new home. This influx of newcomers brings with it a range of economic and social implications and opportunities, including having a massive impact on the real estate market. In this blog, we will explore the growing number of immigrants in Canada and specifically delve into the effects on the real estate market, with a focus on the Greater Toronto Area (GTA).
1. The Immigration Boom:
Canada’s welcoming immigration policies and stable economy have made it an attractive destination for people seeking better opportunities and a high quality of life. The country’s inclusive society, diverse culture, and robust job market have positioned it as a top choice for many immigrants. The federal government’s commitment to welcoming immigrants has led to a significant increase in immigration levels, resulting in a growing population and changing demographics.
2. Population Growth and Housing Demand:
The rising number of immigrants directly influences the demand for housing, especially in metropolitan areas like the GTA. Statistics indicate that about one-third of all immigrants to Canada end up settling in the GTA. With housing being a critical component in the settling of newcomers, immigration is one of the main demand drivers for both rental and homeownership options, putting pressure on the real estate market to meet their needs.
3. Housing Affordability Challenges:
The surge in housing demand, combined with limited supply, has contributed to affordability challenges in the GTA. The region has experienced a significant increase in property prices, making it increasingly difficult for both newcomers and existing residents to find affordable housing options. This affordability issue is further exacerbated by the limited availability of rental units and rising rental prices. Over the past twelve months we have seen pre-construction sales numbers at historically low levels, which means that a few years from now, we will have far less completion of new housing, adding to the issues around the limited supply of homes in our marketplace.
4. Impact on Rental Market:
Immigrants, especially newcomers, often rely on rental housing initially as they settle into their new surroundings. The increased demand for rental properties can lead to a tighter rental market, resulting in higher rental rates and lower vacancy rates. This can pose challenges for newcomers in finding suitable and affordable rental accommodations, particularly in popular areas within the GTA.
5. Economic Boost and Infrastructure Development:
The influx of immigrants contributes to the local economy through increased consumer spending, job creation, and entrepreneurship. This economic boost can stimulate infrastructure development, including the construction of new residential units to accommodate the growing population. However, it is essential for government and local authorities to ensure adequate infrastructure planning to address the increased demands on transportation, healthcare, and education systems, as well as finding efficient ways to navigate through new development applications to shorten the amount of time it takes to approve new housing applications by the local municipalities.
6. Neighbourhood Revitalization and Diversity:
Immigration brings cultural diversity to Canadian cities, enriching the fabric of local communities. Newcomers often revitalize neighborhoods that have experienced population decline or urban decay. This revitalization can lead to improved amenities, increased community engagement, and a vibrant local economy. Moreover, the diverse cultural landscape fosters a sense of belonging and promotes social cohesion.
The growing number of immigrants in Canada, especially in the Greater Toronto Area, has undoubtedly influenced and will continue to be the main driver of real estate values in Canada and the GTA. While immigration contributes to economic growth and cultural diversity, it also poses challenges related to housing affordability and availability. Addressing these challenges requires collaborative effort by all levels and government, to ensure new Canadians have adequate housing options to settle into. For the time being, congratulations Canada for hitting the 40 Million milestone!
