According to this report, Canada’s population is growing at a record rate in comparison to other industrialized nations. This sustained population growth is expected to put upward pressure on home prices, particularly in the more densely populated regions.
In the first quarter of 2021, CREA reported an increase of 1.83% in the national benchmark home price. This is higher than the 10-year average, and CREA believes this to be a result of population growth, with the influx of migrants as well as people moving to other parts of the country from within Canada itself. As the housing supply remains low and the demand for housing increases, the prices of both new and existing homes are expected to continue to rise.
The report also notes that immigration has been one of the main drivers of population growth over the past five years. As economic conditions in Canada remain strong and many foreign countries are still recovering from the global pandemic, the influx of people settling in Canada is likely to continue for the foreseeable future.
Other factors that may play a role in population growth include Canada's increased investment in permanent residency programs, such as Express Entry, as well as the government's commitment to ensuring housing affordability across the country. The report suggests that these initiatives could lead to more individuals and families settling in Canada and further limit the housing supply, thus keeping the prices of housing elevated.
In conclusion, the CREA report states that Canada's population growth is likely to remain strong due to immigration, and this should continue to impact the housing markets across the country for the foreseeable future. The lack of housing supply combined with increased demand for housing is expected to drive up the prices of both existing and new homes. The federal government's initiatives to increase accessibility and affordability of housing may provide some relief, however, it is likely that the upward pressure on home prices will remain strong for the near future.
Analysis:
The Canadian Real Estate Association (CREA) recently issued a report indicating that population growth in Canada is currently at a record high, and will likely continue to rise in the near future. This population surge is being largely driven by immigration, with people from foreign countries and other parts of Canada settling in Canada. With a limited supply of housing, the increased demand for housing put upward pressure on home prices throughout the country.
The report noted that population growth has been a major contributor to the rise of home prices in the first quarter of 2021, with the national benchmark showing an increase of 1.83%. While this increase is above the 10-year average, CREA believes that the sustained population growth is responsible for the uptick. In addition, the government's efforts to ensure housing affordability and increase permanent residency programs have also been cited as possible catalysts for population growth.
Overall, the report indicates that population growth is expected to remain strong due to immigration and other factors, and this should keep home prices at elevated levels in the near future. The lack of housing supply and increased demand for housing will likely make it difficult for people to find affordable housing, so the federal government needs to take action to ensure affordability and accessibility. Nevertheless, it is likely that the upward pressure on home prices will remain for the foreseeable future.
This article was contributed on Jan 02, 2024
