“It is a conundrum.” — Stephen Brown, senior Canada economist at Capital Economics, on the effect of immigration on housing costs.
The conundrum is that immigration is desirable, even needed, in Canada…and that curbing escalating housing prices is also desirable, even needed.
One is expected to fuel the other. If you have high immigration, it probably means higher home prices.
That seems to be the consensus. A headline in the Financial Post read: “Canada opens door to immigrants, adding fuel to hot housing market” and another one on Global News is “Canada’s immigration boost could fuel hot housing market: experts.”
Meanwhile, the Federal Government’s goal of 400,000 immigrants this year is almost certain to be achieved. Next year’s target: another 410,000 immigrants.
Canada wants educated. highly skilled workers from other countries, to replace a workforce eroded by retirements and consistently declining birthrates. Educated, highly skilled workers become investors, especially in homes, and with the short supply of homes available it figures that means the increase in prices may well continue to rise.
In other words, immigration is important, even vital, to assists Canada’s economic recovery. According to Statistics Canada, immigrants tend to buy homes in large urban areas.
That means the Lower Mainland is one of them.