Photo: James Bombales
Canada has long been revered as a welcoming place for newcomers to settle, and new research expects high immigrant interest in homeownership to continue — if affordable housing supply can meet demand.
One in five home purchasers is a Canadian newcomer, about 21 percent of the homebuying population, according to a survey report released today by Royal LePage. Should current international migration rates stay the course, Canadian newcomers are expected to purchase 680,000 homes throughout the country over the next five years. Approximately 31 percent of new immigrants are families with children, according to the commissioned report that surveyed over 1,500 newcomers who have landed in Canada within the last decade.
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Immigrant families tend to focus on putting down roots in communities that are amenity-rich and have access to employment opportunities and good school districts, though it can be a challenge to find affordable housing in these desirable areas. While the homeownership dream is alive and well, only 32 percent of newcomers own a home, compared to the national homeownership rate for all Canadians at 68 percent.
In tandem with first-time home buyers, newcomer demand for housing has pushed up prices on entry-level housing in some family-friendly neighbourhoods. Jason Ralph, managing partner at Royal LePage Team Realty in Ottawa, notes in the report that demand in his city has “put considerable upward price pressure,” on inventory in the $300,000 to $500,000 range.
“Ottawa is a very attractive destination for newcomers to Canada. Similar to Canada’s other urban centres, the city offers best-in-class healthcare, great schools and safe, friendly communities but with real estate prices roughly half of the cost of Toronto and a third the cost of Vancouver,” writes Ralph.
While 75 percent of new immigrants come to Canada prepared with savings to help purchase a property, the survey found that the average time newcomers wait to purchase a home is three years. In Canada’s most expensive provinces, Ontario, Quebec and British Columbia, new immigrants are more likely to rent their first home than purchase right away — 72 percent of British Columbia newcomers rent, compared to Alberta, where only 55 percent sign a lease.
The preference for detached homes among newcomer buyers is higher compared to other types of housing. Fifty-one percent of new immigrants purchased a detached house, while 18 percent bought a condominium and 15 percent chose a townhouse. Given that the majority of immigrants are families with children, owning a detached home with space to run around is preferred.
Phil Soper, president and CEO of Royal LePage, notes in the report that the housing demand for new and young Canadians can be reached through policies that foster sustainable development, while protecting and nurturing urban green spaces.
“Canada’s economy and labour markets are expanding and it is crucial that housing supply keeps pace,” writes Soper.