Higher migration driving rental prices up; vacancy rates fall, says report

The Trudeau Liberals want to welcome upwards of 500,000 immigrants annually by 2025. However, a Leger survey reveals that nearly half (49%) of Canadians say their plan is too ambitious.

Higher migration driving rental prices up; vacancy rates fall, says report
Tom Rumble on Unsplash
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In its annual rental market report, the Canada Mortgage and Housing Corporation (CMHC) attributed record-breaking migration to partly driving demand up for rental properties.

According to CMHC economists, "significantly higher net migration" drove demand to outpace housing supply. In 2022, Canada’s vacancy rate fell to an over-20-year low. 

"Growth in demand outpaced strong supply growth, pushing the vacancy rate for purpose-built rental apartments down from 3.1% to 1.9%. This was the vacancy rate’s lowest level since 2001," wrote economists for the crown corporation.

In 2021, the Trudeau Liberals committed to successive 10,000 quota increases in 2022 and 2023 at 411,000 and 421,000 permanent residents to tackle 'unprecedented' shortfalls caused by COVID travel restrictions and border closures.

According to Immigration, Refugees and Citizenship Canada (IRCC), the country added just over 437,000 new permanent residents in 2022, accounting for three-quarters of the country's population growth. 

Ontario, BC, and Québec observed the highest flows of new immigrants, reads the report, placing additional demand pressures on their local markets.

Cities in British Columbia consist of most of the top five costliest real estate markets to rent nationwide. Arrivals of international immigrants to the province doubled in the first half of 2022. 

Most of these immigrants settled in Metro Vancouver, contributing to growth in rental demand, with renting a two-bedroom unit typically costing residents a whopping $2,002.

According to the report, Toronto is the next most expensive city to rent, with similar units costing $1,779.

The latest estimates from Statistics Canada indicate that Ontario had the highest level of international migration in the past 50 years. Historically, the GTA accounted for approximately 80% of net international migration to Ontario.

Recent IRCC data uncovered that from January 2022 through October, over a quarter of new permanent residents intend to reside in the Toronto region — among the most expensive real estate markets nationwide.

Furthermore, Toronto posted the most significant gap between the growth of demand and supply, driving down the vacancy rate considerably in the city.

Rising international migration also took advantage of cheaper rent in Quebec City and Montreal, with the former tripling in 2022 compared to the year before. In Montreal, the vacancy rate for rental properties fell from 3.7% to 2.3% last year.

A recent poll found that excessive strain on Canada’s housing availability and healthcare system is on top of mind for Canadians regarding high immigration numbers. 

The Trudeau Liberals want to welcome upwards of 500,000 immigrants annually by 2025, per their immigration plan. It calls for the admission of 1.45 million more new permanent residents over the next three years, equivalent to 3.8% of the country's population.

"It is a testament to the strength and resilience of our country and its people. Newcomers play an essential role in filling labour shortages, bringing new perspectives and talents to our communities, and enriching our society," claimed Canada's Immigration Minister Sean Fraser in early January.

However, the Leger survey revealed that nearly half (49%) of Canadians said the Trudeau Liberal immigration plan was too ambitious.

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