Canada’s Population Is Growing: What This Means For The Housing Market


Canada’s Population Is Growing: What This Means For The Housing Market

Photo Source: LInedPhoto

Canada’s population is exceeding major growth milestones fast. According to a recent analysis released last week by Bank of Montreal (BMO) economists Doug Porter and Robert Kavcic, Canada’s population has surpassed the 37 million mark, in just the second quarter of this year. This growth has been the fastest the country has seen since 1991 –officially making it the fastest-growing country in the G7.

Photo Source: Kyle Glenn

While population growth has positive effects on the economy, rapid growth may cause some implications. For example, according to the report, in the past year Canada saw an influx of 500,000 migrants. That number roughly translates into 180,000-200,000 additional households, creating demand for a similar number of units. As a result of the incoming demand, upward pressure is forced on the housing market, predominately in large cities. “With population inflows still so heavily concentrated in the major cities, it has also reinforced upward pressure on home prices in the priciest, and more supply-constrained markets.”

Photo Source: Daniil Silantev

When discussing already tight markets like Toronto or Vancouver, this may cause home ownership to be even further out of reach due to the increased competition, resulting in additional individuals being squeezed out. While new construction starts have increased these past months, hitting record numbers in June, they have begun to slow back down when reaching July. According to a recent report by the Canada Mortgage and Housing Corp (CMHC), the rate of housing starts hit record levels in June at 246,2000 new units, after falling to 206,314 units in July. Kavcic noted that the decrease is partially due to the higher cost of materials.

Photo Source: Jacek Dylag

While new home construction is reaching eminent numbers, we must ask: are they meeting the appropriate figures to feed the demand? There has been a lot of community backlash (click here to view recent Cabbagetown opposition) when the city proposes new developments in a specific neighbourhood. This opposition group, called the NIMBYs (Not In My Back Yard) are the ones challenging these developments. Some are doing it because of the fear of increased noise, and others due to potential views being obstructed. Being a part of a growing and thriving city means your neighbourhoods are subject to change – which means obstructed views , or increased traffic. Toronto is growing and at a fast pace, and these are some of the facts we cannot ignore:

1) High demand (especially in metropolitan areas) is causing the markets to tighten.

2) Increased population = increased demand. It will only get tighter.

3) Approval processes are strenuous, and due to community opposition it takes longer for developments to be approved.

3) Lengthy approval processes result in less construction starts.

4) We are still facing a large lack of supply a.k.a we are running out of space to build.

We can work together to find appropriate solutions in order to feed the demand and open up the supply.

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