Canada’s housing market is already hot at a time when there are many travel restrictions, with borders reopening and more immigrants coming to Canada, experts predict it could get hotter.
“The numbers tell us that price should go up because a lot of people are coming here and we are not building enough new properties, “said Tom Storey, a real estate agent at Toronto real estate firm LePage according to the Toronto Sun.”
“If you think it’s expensive now, wait and see.” He said.
It’s unclear when new arrivals will affect the housing market, and Canada’s borders are now open only to those who can prove they are fully vaccinated. However, both the U.S and Canadian governments have said they hope border traffic will return to normal once the threat of a pandemic is over.
Similarly, while 401,000 new permanent residents will be added this year(an increase of a 1.2million by 2023), COVID-19 travel restrictions have been preventing new immigrants from coming to Canada, as required by Canada’s immigration targets.
The government has long stressed that Canada needs immigrants to fight an ageing population and to continue to grow its economy. But immigration will also put pressure on the real estate market, whether they want to buy a house or rent a house.
In addition to new permanent residents, the number of international students in Canada is also growing rapidly. According to government data, the number had risen sharply before the pandemic, with the number of international students rising to 402,500 in 2019, up 15 per cent from 2018.
Those with temporary work permits are also increasing the population. In 2019, nearly 70,000 people have been granted work permits(bringing the total to 404,000), of whom 63,020 have finally been granted permanent residency.
This year, the ratio of home completions to the population has improved slightly as the number of new immigrants entering Canada has decreased. A recent report by Scotiabank said housing conditions could worsen as the government meets its immigration targets.
Experts say the government’s immigration targets should be aligned with its housing policies to help meet market demand in order to avoid a sustained and rapid rise in house prices.
“Our federal government is now deciding to raise its immigration targets without a housing policy that increases housing supply, a decision that pushes up prices and makes it unaffordable for most Canadians in the future, including many of our new immigrants,” John Pasalis, president of Toronto-based reality, said in a recent market report.”