Photo: Maya-Anaïs Yataghène/Flickr
Nearly three-quarters of a million non-permanent residents (NPRs) call Canada home, a growing demographic that is “helping to reshape the country’s housing market,” says a new report from CIBC World Markets.
In their report, the bank says the number of NPRs in Canada has climbed by more than 450,000 over the past decade to a record 770,000, with 95 per cent being under the age of 45 — an all-important economic demographic.
“If it were not for the rise in NPRs, Ontario would have experienced a decline of 120,000 people in the 25 to 44 age group,” CIBC economist Benjamin Tal states in a release. “The impact on British Columbia is also significant, with NPRs, accounting for all of the growth in that age group.”
It is not a coincidence, Tal says, that those two provinces are also the ones experiencing long-lasting strong housing market activity. (Indeed, in their most recent report, the Canadian Real Estate Association said national home price growth in March was fueled by big gains in Toronto and Vancouver.)
Given the demographic picture, Tal says it is fair to assume that NPRs play an important role in demand for rental units in both provinces. Temporary workers rent, which affects the buying habits of real estate investors — “a factor that is largely behind the recent boom in the condo market in cities like Toronto and Vancouver,” Tal states in the report.
Because of the group’s growing economic significance, Tal says the federal government should think carefully before making any more changes to the temporary workers program.
“From both an economic and policy perspective, non-permanent residents, in general, and temporary workers, in particular, should no longer be viewed as a marginal and reversible factor aimed at solving temporary mismatch issues in local job markets. Rather, they should be viewed as an important demographic force capable of influencing and potentially altering the trajectories of macro-economic variables such as housing activity and consumer spending.”
Any future policy aimed at limiting the growth of non-permanent residents in Canada should be supplemented by an offsetting boost to immigration policies, the CIBC report concludes
For more, the complete report can be found here.