Despite the pandemic, Canada sits at almost 37 million people outpacing every other G7 country in population growth. This news comes straight from the 2021 census data released this year. Approximately 1.8 million more people live in Canada than there were five years ago, which is a growth rate of 5.2 per cent.
And if you were wondering, immigration — not birth rate — was the driver of Canada's population growth from 2016 to 2021. According to the census data, Canada is expected to maintain a positive natural growth rate due to citizens having babies for the next 50 years. However, the most significant chunk of population growth came from newcomers.
In 2019, for example, the country's population grew by 583,000, or 1.6 per cent — a record high. Proving that most of the growth occurred before the pandemic kicked off.
In 2020, however, with the introduction of the global border and travel restrictions implemented to slow the spread of COVID-19, population growth from immigration declined to less than one-quarter of the previous year.
It is said that 2020's population growth was so low that we would have to go back 100 years to the first World War to find population growth as low as what was reported in 2020.
Still, with all the uncertainties in the world due to the pandemic, Canada led the other G7 countries over the year.
When it comes to Canada's housing, it is often compared to its G7 peers, but that is only relevant for some issues — and housing is not one of them. According to the Bank of Montreal's report, Canada has the lowest housing stock per person in the G7. Plus, the typical home across the country is 41 per cent more expensive than in January 2020. In Toronto, the typical price of homes rose 52 per cent over the past two years. Those two ingredients alone are the formula for supply and demand irregularities.
The data shows that the country has also become more urban, with residents settling in the cities' downtown core faster than during the preceding five years. Downtown Toronto's population grew three times faster than that of the entire City of Toronto. The number of Canadians living in rural areas in 2021 was 6,601,982, an increase of 0.4 per cent over 2016, but that growth rate was far below that of Canada's urban centres, which grew at a rate of 6.3 per cent—proving against the perception that a large chunk of city dwellers moved to rural areas at the beginning of the pandemic. Toronto remains Canada's most populous Census Metropolitan Centre (CMA), with 6,202,225 residents. Montreal came in second at 4,291,732, followed by Vancouver with 2,642,825 people. City living, especially in Toronto, is still in huge demand.
At the same time, there has been an uptick in housing supply in Canada over the last two decades, which is excellent news for the country as a whole. However, in the urban areas, this uptick is less than enough. Let's use Ontario as an example — at the current rate of construction, which is considered to be moving quickly, Ontario is short 70,000 homes and 200,000 rental units over the next ten years.
Some even speculate that with the rise in dwellings, more residents choose to live alone, putting further pressure on the real estate market in urban areas. The 2016 census showed that one-person households were the most common type of household in Canada, surpassing couples with children for the first time. At the time, StatsCan suggested that the trend of living alone had increased demand for smaller, individual housing units, which can be built in more significant numbers than houses.
So, while urban planning focuses on building single occupancy homes, family size homes are becoming rarer and more expensive, especially across the nation's CMA's.
Housing shortages and price growth go hand in hand. Basic business knowledge says that when demand for a product is high and supply is low, prices tend to be higher. Conversely, when the demand for a product is low and supply is high, prices tend to be lower. The real estate market is no different.
Not only is Canada talking the talk when it comes to opening its borders to immigration, but Canada is also walking the walk, and it's showing no signs of slowing. In 2020, Canada announced its commitment to accepting over 1.2 million immigrants over the next three years, and the projection is on pace even with the unexpected pandemic in 2020. Under its new Immigration Levels Plan 2022 - 2024, Canada is targeting approximately 432,000 new immigrants this year which would be the highest in history.
Current data shows that 1 in 5 newcomers to Canada purchase a home, and the rest rent upon arrival. 50% of the renters reside in Ontario. Depending on what you're in the real estate market for, rent vs. own, this is something to consider.
If you are an investor, the growing population is an opportunity to have income properties that are always in demand. Both Canadians and 4 in 5 immigrants are in the market for rental properties, which are already short by 200,000 over the next ten years, says the Federation of Rental-Housing Providers of Ontario (FRPO) and Urbanation.
If you are looking for a property to use as your primary residence, condos are one of the most affordable options on the market. However, this also makes the condo market more competitive than ever. It is likely that even with government initiatives like the Housing Action Plan and the Rapid Housing Initiative, supply and demand will continue to be a reality in our urban centres.
For both condo investors and those looking for a residence to call home, working with a platinum access real estate team to help you navigate the changing marketplace is a must and the secret to securing a unit before the general public. At GTA-Homes, we do just that. Connect with us to learn more.