Canada’s largest real estate markets have seen another demand factor almost disappear. Government of Canada (GoC) data shows permanent residents admitted fell in July. The decline was strongest in two of the country’s largest real estate markets – Toronto and Vancouver. Meanwhile, Montreal is starting to see improvements, in contrast to last year.
Toronto Permanent Resident Arrivals Fall 64%
The number of permanent residents admitted to Toronto is seeing declines become larger. There were 4,450 permanent residents admitted in July, down 64.0% from the same month last year. Year-to-date there were 69,825 people admitted, down 40.82% compared to the same period last year. July’s decline is almost 50% larger than June, so the declines are getting much larger. The year-to-date rate of decline is also smaller, confirming July’s acceleration. The drops aren’t getting better, they’re getting worse.
New Canadian Permanent Residents By Market
The monthly number of permanent residents admitted to Canada, by intended market to reside.
Source: Government of Canada, Better Dwelling.Vancouver Permanent Resident Arrivals Fall 71.1%
Vancouver’s permanent resident arrivals also saw a sharp decline – even bigger than Toronto. There were 1,300 permanent resident arrivals in July, down 71.1% from the same month last year. Year-to-date the number reached 22,435 arrivals, down 33.03% compared to last year. The monthly drop was more than 3x what was seen a month before, and more than double the year-to-date rate. Year-to-date numbers are huge, but smaller than the national average.
New Canadian Permanent Residents By Market Change
The percent change of permanent residents admitted to Canada per month, by intended market to reside.
Source: Government of Canada, Better Dwelling.Montreal Permanent Resident Arrivals Fall 47.2%
Montreal is one of the few regions to see smaller declines of permanent resident admissions in July. There were 2,110 people admitted in July, down 47.2% from the same month last year. Year-to-date this worked out to a drop of 43.2%, compared to the same period last year. This is one of the few major real estate markets to actually see the declines get smaller. However, the declines in Montreal actually started before the pandemic, so there are more widespread issues regarding attracting permanent residents.
Permanent resident flow is often seen as a driver of population growth, a big factor for real estate prices. With permanent resident arrivals declining by more than half, we’re seeing one of the biggest fundamentals weaken. RBC has previously forecasted this problem will persist for at least another year.
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Canada doesn’t need people to live in the houses. They’ll be empty and rise in price. lol
It doesn’t matter, because demand is high. If people want to buy property, it doesn’t matter if other people don’t. The price is what they’ll pay.
Facepalm. You forgot the other side of the equation. Supply matters too.
Demand is high because of pent-up demand. But according to the blog published on Sept 16th., that is only temporary. Demand will subside.
It’s also stoked by the availability of easy private money and alternative lending which is available to pretty much anyone at historically low rates. If you want to slow this down tighten up on the Alternative lenders and properly regulate the private lenders.
When the BoC engages in a mandate to inflate home values during weakening fundamentals like recessionary unemployment, you have to wonder why people are dumb enough to support the government.
I don’t quite understand Canada’s immigration policy. Historically we need immigration to fill jobs as our economy grows.
But now it seems like we need immigrants with money and no credit record it n Canada so that they can buy a house and get lots of financial debt based products. (Lines of credit, CCs, etc…)
But there are only so many rich immigrants, and we still compete with other countries for their money and moving here.
So that leaves the skilled immigrants with not so much money, but the ability to get a high paying job, then get leveraged up with a mortgage and other misc debt.
That formula kinda falls flat on its face when Canadian unemployment is at all time highs though..
Bingo. We don’t need labor class immigrants, we’re just hoping to keep GDP from falling since credit growth is a drag on growth.
More homes at inflated prices = fewer dollars towards GDP. Make it up with more people.
Governments are lucky Canadians aren’t smart enough to understand the difference between GDP and GDP per capita, because the latter was falling much before the pandemic.
I am beginning to reconsider how I feel about our countries immigration policy. I am pretty far left and grew up in a place where I (white, Canadian born) was a minority, so I’ve traditionally been pretty pro, but I am starting to wonder if our immigration policy is not just not great for Canada, but also a Ponzi scam being run on immigrants themselves.
If you are the sort of person who can come to Canada on points-based immigration (young to early-middle aged, educated, speak English, in a high demand profession or occupation) and you’re coming from a rapidly-developing country in the global south (India, Philippines, Ghana), I’m not sure it makes sense to come here.
You will face racism and bullshit “Canadian experience” discrimination, likely have at least a temporary drop in your standard of living, and when you finally start getting your feet under you, the best way to “get ahead” is to load up on debt you can’t totally afford, buy real estate, and then hope to sell it at a profit to the next guy into the country before the debt becomes a problem. You can only do that so much before the system becomes unstable, no?
I am an immigrant of 10 years. When I came to Canada I couldn’t even get a regular credit card. I had to get one of those “CapitalTwo” prepaid cards and build a credit rating.
Of course it did not matter if you have good credit where you came from.
I am really not sure how new immigrants nowadays shell out 800K for a new house, with NO credit rating whatsoever. Do they pay cash? Times must have changed.
What else does Canada have other than real estate though? They’ll just accelerate the standards and processing to make sure people can come in as quickly as possible.
It’s my understand a lot of universities issued wavers for students to say they could enter as a requirement.
I had a vision lastnight, tens of thousands of people in the streets chanting bring down house prices or bring down the Liberals. With the younger generations getting screwed by government sponsored real estate bubble, we might see this soon.
Speak up young people, for your rights and for your dignity. Housing is now the shackles of modern day slavery
As long as young people continue to vote against their interests because they love the leader’s hairdo, nothing will change. They should be aggressively contacting their MPs to pressure them to begin the conversation to tax principal residences.