2023-06-17 06:55:41
A graph prepared by National Bank economists is revealing. The working-age population jumped by 204,000 in the first quarter of the year in Canada, a record.000people over a full year in 2022.”,”text”:”For comparison, writes economist Stéfane Marion, the population of the United Kingdom increased by 200,000 people over a full year in 2022.”}}”>By comparison, writes economist Stéfane Marion, the UK’s population grew by 200,000 people over a full year in 2022.
However, housing starts during the first three months of the year in Canada amounted to only 57,000 units. This gives us, according to the National Bank, a ratio of housing starts to the growth of the working-age population of 0.27. This is a record low and is well below the historical average of 0.61.
« The lack of new housing starts in the face of very strong population growth will continue to put pressure on housing affordability over the coming quarters. »
According to the Canada Mortgage and Housing Corporation (CMHC), the annualized rate of housing starts in the country in May fell by 23% compared to the level of April. The markets of Vancouver (- 45%), Montreal (- 35%) and Toronto (- 28%) are slowing down, according to the organization.
The real estate market, recovering
Meanwhile, property sales are on the rise again, with growth of 5.1% in Canada in May compared to April, according to the Canadian Real Estate Association. This is the fourth month of progress in a row. Actual sales over one year, from May 2022 to May 2023, are up 1.4%, a first since June 2021.
Despite the rise in rates, more specifically nine increases by the Bank of Canada since March 2022, the real estate market is recovering, both in terms of sales and prices. The accelerated population growth has something to do with it, while demand is growing thanks to a higher contribution from immigration to Canada.
Thus, the real estate market is becoming less accessible due to the rise in rates and the rise in prices, which leads households to turn to the rental market. This demand puts upward pressure on rental prices, a market that is becoming completely unbalanced. Some can’t even find a home anymore…
According to CLOSE3.5 million new housing units are needed in the country by 2030 to restore housing affordability, including 620,000 in Quebec alone.
We should start taking care of our world
In a letter sent Wednesday to Prime Minister Legault, elected municipal officials and social and economic actors are calling for rapid action to increase the supply of housing. We’re heading for the biggest drop in the number of housing starts in nearly 30 years and it’s time for an emergency, they say.
Economy zone, Wednesday evening. That’s why we need a plan, everyone has to be around the table. If I were the Prime Minister, I would be happy to see that there are people from all walks of life who want to sit down with him to be able to find solutions.”,”text”:”Building starts , it is not done by shouting scissors, said the mayor of Gatineau, France Bélisle, to Economy Zone, Wednesday evening. That’s why we need a plan, everyone has to be around the table. If I were the Prime Minister, I would be happy to see that there are people from all walks of life who want to sit down with him to be able to find solutions.””>Construction starts are not done by shouting scissors, said the mayor of Gatineau, France Bélisle, to Economy zone, Wednesday evening. That’s why we need a plan, everyone has to be around the table. If I were the Prime Minister, I would be happy to see that there are people from all walks of life who want to sit down with him to be able to find solutions.
« We often hear people in the field say that it’s a battle of governments. It is true that it is. But, at some point, we’re talking about humans and a roof over their heads. And, as far as I know, we are still in Maslow’s pyramid of a Quebec that has values. We should start taking care of our world and do it all together. »
The housing vacancy rate is 1.7% in Quebec and 0.8% in Gatineau.
Demographic pressure
Canada welcomed 431,645 new permanent residents in 2022. The country has targets of 465,000 in 2023, 485,000 in 2024 and 500,000 in 2025. At this level, the growth in the number of immigrants will reach almost 50% compared to the pre-pandemic level.
If Canada had maintained its 2019 level of arrivals of new permanent residents, the country would have received, between 2020 and 2025, nearly 450,000 fewer people. This would not have completely resolved the issue of the housing shortage, far from it. But the pressure might be a little less strong.
Welcoming immigrants is demanded and desired by the business community to alleviate, in part, the labor shortage. But at the current rate, this policy is creating additional pressure on access to housing in the country, not to mention the other economic effects, particularly on inflation.
In this context, Stéfane Marion wrote a few weeks ago that the Government of Canada should consider revising its immigration targets to allow supply to catch up with demand
. The imbalance is too great right now for Justin Trudeau’s government to ignore the situation.
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