What to Expect from the Coming Immigration on the Real Estate Market
The Canadian real estate market is influenced by several critical factors, including interest rates, demographics, new home construction and immigration. Today we’re going to look at the last-mentioned item – immigration.
Immigration at a Standstill in 2020
Immigration is one of the areas most affected by the Coronavirus pandemic. Immigration in Canada was essentially at a standstill during COVID times. This is in contract with the normally 400,000 or so newcomers that have come to the country in recent years.
- This means that the Canadian real estate market has had to survive without the regular influx of immigrants in 2020. However, this hasn’t mattered during COVID times. The real estate market has been surviving on its own just fine. We have seen both records for home sales and home prices since the start of the pandemic. But can that continue forever? That’s the million-dollar journey.
Canadian Real Estate during COVID Times
A big reason that the Canadian real estate market was fine during COVID times is that COVID represented a unique opportunity for Canadians. With the ability to work from anywhere for millions of Canadians, people no longer had to buy a home within commuting distance from their workplace. This opened up an all-new realm of possibilities.
Canadians suddenly started moving outside of big cities like Toronto and Vancouver. We saw record home sales in the areas surrounding big urban centres, in smaller towns, you usually wouldn’t know this sort of activity like Windsor and Sudbury. That begs the question, what’s next?
What’s Next for Real Estate in 2022 and Beyond?
One of the big drivers of real estate is interest rates. But with fixed mortgage rates on the rise and variable mortgage rates possibly following in the coming months, what does 2022 and beyond have in store for real estate?
If a lot of employers require their workers come back into the office, we could see an influx back into the city. But something like that would only be temporary and might not offset any increase we see in interest rates.
However, with Canada increasing its immigration targets, this could help offset any potential decline we might see in real estate.
Originally Canada set targets of 351,000 immigrants and 361,000 immigrants in 2021 and 2022, respectively. However, Canada has since increased its targets to 401,000 in 2021, 411,000 in 2022 and 421,000 in 2023.
While real estate isn’t expected to move at the torrid pace it has been moving at in the coming years, the increased immigration should hopefully help offset any losses we would have otherwise seen.
The Bottom Line
Are you curious how other factors might affect the Canadian real estate market? Contact our mortgage experts today to discuss how the real estate market is expected to shape up in the coming months and years.