Canadian real estate will have strong demand, but growth is projected to shift soon. Canada Mortgage and Housing Corporation (CMHC) published household projections earlier today. The projection is based on Statistic Canada (Stat Can) population projections made in 2019. Even by the slowest measure, a rise in household formation is expected. However, traditionally high growth markets should begin to peak right around now. Replacing them as growth leaders are places with younger families, like the Prairies.
Canada Is Projected To See Strong Household Growth
The national growth rate is divided into three projections (low, med, high) and sees an increase in all. Based on Stat Can data, the CMHC projects between 2.4 million and 4.7 million new households over the next 2 decades. The growth rate is projected to peak in 2021, led by a spike in international migration. From there on, it should decline due to an aging population and lower fertility rates.
Ontario and B.C. To See Household Growth Peak Soon
One surprising piece in the data is B.C. and Ontario are both projected to pass peak growth around now. The agency notes both provinces will see younger age cohorts continue to grow. However those numbers will lag some other regions, due to larger aging populations. Bigger numbers are hard to grow in general, but the demographic makeup will slow it further.
Canada’s Prairies Projected To Lead Household Growth
Faster growth is seen in the Prairies according to the agency. A combination of higher growth of family-aged demographics should give a natural boost. Strong interprovincial migration is also seen adding to the trend. The populations in these regions are also smaller, so it’s also easier to see bigger growth. The agency projects this trend will be particularly strong in Alberta.
These projections are based on numbers from 2019, before the pandemic. Things have changed a little since then, especially in terms of international migration. That could mean peaking in Ontario and BC may have already passed. It could also mean faster interprovincial migration, as work from home removes commute times.
Important to remember while this tells us about housing demand, it doesn’t tell us how much. Depending on how existing housing stock is treated, the life cycle could be faster or lower. This could accelerate the amount of building required, or slow it down. The CMHC notes starts to accommodate may be higher or lower than formation. We do get an idea of which regions may represent higher economic growth rates though.
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