![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2020\/11\/immigration_boost-1.jpg\")
<\/a>Photo: James Bombales<\/em><\/p>\nThe federal government\u2019s new immigration targets aimed at making up for this year\u2019s newcomer shortfall will provide support to local housing markets across the country, especially in major urban centres.<\/p>\n
On October 30th, Canada\u2019s government revealed its three-year plan<\/a> to welcome 1.2 million immigrants to the country between 2021 and 2023. If the targets are met, the immigration boost will compensate for 2020\u2019s drastically reduced numbers that came as a result of application and travel constraints caused by the COVID-19 pandemic.<\/p>\n The new immigration targets, which represent approximately one percent of Canada’s population, would bring an additional 50,000 immigrants per year on top of the previously established targets.<\/p>\n\n Whether renting or buying, the Toronto Regional Real Estate Board\u2019s (TRREB) Chief Market Analyst Jason Mercer explained that the Greater Toronto Area\u2019s housing market benefits from new immigrants, where cultural and labour diversity attracts newcomers worldwide.<\/p>\n \u201cGrowth in the housing market is predicated on population growth, and from Canada\u2019s perspective and certainly drilling down into the GTA, immigration is a key driver of population growth,\u201d Mercer told Livabl<\/em>. \u201cThe GTA, I would argue, is Canada\u2019s single greatest beneficiary of that immigration.\u201d<\/p>\n While only 60 percent<\/a> of 2020\u2019s 341,000 newcomer target is expected to be met, CIBC Capital Markets’ Deputy Chief Economist Benjamin Tal explained that there\u2019s a few offsetting factors at play \u2014 a significant portion of new immigrants are already in the country, the number of returning citizens to Canada is increasing, and the phenomenon of \u2018brain drain\u2019<\/a> has been reduced.<\/p>\n \u201cThere are many forces that are compensating for the fact that new immigrants [are down], but clearly it is a factor that is mostly impacting the rental market at this point because most of them are renting,\u201d said Tal.<\/p>\n Canada\u2019s rental markets, particularly in large cities, have seen rental prices slashed and more supply hitting the market, mostly due to far fewer international students and immigrants arriving this year amidst the global pandemic. However, Mercer said that a boost in immigration over the next three years could absorb rental inventory quickly, tightening the market back up and increasing average rents again.<\/p>\n Only 18 percent of newcomers, on average, purchase a condo, according to a 2019 market study<\/a> commissioned by Royal LePage. However, Mercer explains that condo markets could also experience a higher rate of inventory absorption from immigrants with new condo supply coming online.<\/p>\n \u201cIt stands to reason that if you\u2019re moving from rental into homeownership, for a lot of newcomers as well, the condominium market may be the first thought,\u201d said Mercer.<\/p>\n On average, a newcomer purchases real estate three years after<\/a> moving to Canada. Tal suggests that today\u2019s purchasing newcomers are not necessarily impacted by the virus. Instead, any delays to immigrants buying real estate will be felt three years from now instead of next year, but a lot can still change in that time.<\/p>\n<\/a>Photo:\u00a0Erik Mclean<\/a>\u00a0\/ Unsplash<\/a><\/em><\/p>\n