New immigrants account for 70 per cent of the increase in Canada’s population. Half of these new immigrants are aged between 25 and 44, representing the country’s economic engine, says the report.
“Ask any real estate developer in any of Canada's major cities about the risk of overbuilding, and the first line of defense would be immigration and its critical role in supporting demand,” says Benjamin Tal, CIBC’s deputy chief economist. “It turns out that, at least for now, this claim is more valid than widely believed.”
Non-permanent residents, such as students, temporary workers and humanitarian refugees who are currently residing in Canada, add another cushion for the housing market.
Residential investors should look to this population as tenants, since they have a relatively high propensity to rent.
CMHC’s 2014 Canadian Housing Observer
, published today, also reiterated the message of the CIBC report, observing that immigrants continue to be important influences on housing demand.
It also showed that, although the majority of immigrants arriving between 2006 and 2011 continued to settle in Canada’s largest metropolitan areas (33 per cent in Toronto, 16 per cent in Montreal, 13 per cent in Vancouver) increasing percentages are settling in smaller cities and communities.
Sheila Botting, national real estate leader at Deloitte, says: “The general dynamic behind the housing market is directly related to immigration.
“In Canada, we immigrate around 250,000 new Canadians every year. As you can imagine, with those new Canadians that come in, they are going to require any kind of housing product, whether or not they choose apartment buildings, townhouses through to single-family homes.”
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Ignore the rumours of “overbuilding,” says a new report – even more properties will be required to satisfy immigration levels now expected to surpass expectations.