Canada joins housing shortage circus

Canada’s population rose to 37 million people in 2021, up 5.2% from 2016, driven mostly by immigration.

The Canadian Trudeau Government recently ramped-up the nation’s immigration intake to an insane 401,000 over the next five years in a bid to catch-up with lower numbers over the pandemic. This immigration influx will be achieved by dramatically lowering entry standards and handing-out permanent residency to international students like tic tacs.

Much like Australia, Canada is battling a housing affordability crisis, after dwelling values surged by more than 30% since the beginning of the pandemic, according to Teranet:

Canadian house prices

The national housing agency, the Canada Mortgage and Housing Corporation (CMHC), claims housing starts have failed to keep pace with growing population, fueling the affordability ‘crisis’:

The biggest issue affecting housing affordability in Canada is that supply isn’t keeping pace with demand. Simply put, Canada is facing a housing shortage…

Canada’s Housing Minister, Ahmed Hussen, made similar statements in a recent interview, noting that the “dramatic increase” in Canada’s population (read immigration) has outrun housing supply:

National home prices have more than doubled since Trudeau took office in late 2015, and gains have far outpaced those of the United States and Canada’s other Group of Seven peers over the last 15 years…

“We simply have not had enough housing supply in Canada to reflect the dramatic increase in our population compared to our G7 partner countries,” Canada’s Housing Minister Ahmed Hussen said in an interview.

Hussen pointed to OECD data showing Canada has fewer homes per 1,000 people than the G7 average. The existing shortfall adds up to about 1.8 million homes, according to Scotiabank estimates.

Obviously flooding Canada with 400,000 extra people every year will massively worsen any housing shortage, lower housing affordability, and consign more Canadians to live in high-rise shoe boxes.

Much like in Australia, any housing shortage problem is really and excessive immigration problem.

Unconventional Economist

Comments

  1. – The usual clap trap (immigration drives housing prices).
    – If immigration drives hsouing prices higher then why rose canadian property prices during the pandemic in 2020 & 2021 (think: zero immigration) ?
    – If there is a housing shortage in Canada then why were home / property sales in Toronto down 40% in april 2022 (compared to april 2021) ?
    Sources:
    https://www.cbc.ca/news/canada/toronto/toronto-home-sales-down-1.6440715
    Quote:
    “The average home price in Toronto in april was CAD 1.2 million, down from CAD 1.3 million a month earlier.”

    See also:
    https://www.youtube.com/watch?v=SWM06VlX-G4
    https://www.youtube.com/watch?v=3CyhOoknpDk

    • The Canadian government (like ours) says that it is experiencing housing shortages because supply has not kept pace with population growth (immigration). They claim this has driven unaffordability. I am merely pointing out the contradiction in how they complain about ‘lack of supply’ while creating the problem by pumping mass immigration.
      What don’t you understand?

    • Maybe like Australia low interest rates were a big factor. Also expats coming home verses temporary visa holders leaving. Also population growth is more a long term factor and we still had 15 years of hyper immigration to absorb.

      • Spot on pjb63. Immigration is a long-term structural factor. Just look at how Sydney and Melbourne house prices decoupled from the other capitals when immigration ramped-up. No surprise, given most migrants go to Sydney and Melbourne.

        Given all capitals have the same interest rates and housing policies, immigration was the difference.

        • The Travelling PhantomMEMBER

          Look at Melbourne’s health crisis too..
          It’s collapsing under the heavy weight of demand as it lacked the support through out the years of massive immigration that police are doing paramedic jobs (same applies to public transport and roads but not as much a problem)

    • If immigration drives hsouing prices higher then why rose canadian property prices during the pandemic in 2020 & 2021 (think: zero immigration)

      Why rose indeed! John Cardogen would be the best person to respond to that query.

      There is no single factor that will always drive hsouing prices higher.
      Even a genius like yourself Willy2 will be unable to find any one factor that is 100% correlated with hsouing prices. The closest factor I can find is deposits into Real Estate agent trust funds. These seem to drive hsouing prices.

      If only there was some way to lower deposits into Real Estate agent trust funds. This might be the way to solve the hsouing shortage and get all families into decent hsouing without actually building enough of it.

      • – Agree. There is not a single reason why property prices have moved up so much in the last say 70 (!!!) years. I once read a very good article that was able to list some 10 to 15 reasons that have an impact on the value of real estate / property.
        – A LOT OF people overlook the impact of more and more women entering the workforce. It meant that a household instead of having one income now has 2 incomes. Then a married couple can afford a higher rent and a larger mortgage. And that’s ONE reason (of many) property prices have gone up so much in the last say 70 years. The Millennials are blaming the Baby Boomers of those high property prices but the Millennials should look in a mirror to see the reason for those higer property prices.

  2. Forget dollars and price.

    The best simplification is:
    When an item is created faster than it is needed/wanted then it becomes easier to obtain.
    When an item is created slower than it is needed/wanted then it becomes harder to obtain.

    Is a decent* house in Sydney becoming easier to obtain or harder to obtain? Answer: harder.
    decent* = or of any given standard

    This is because the supply of houses has not kept up with the demand for them. Put bluntly the number of extra houses built is not matching the number of immigrants allowed in. Neither is road, rail, hospital, water or other infrastructure you care to name.

    Why then does the average price of a house not track precisely with immigration numbers? If 321,987 immigrants come into Australia why does the average house price not increase exactly $321,987 that very same year? Because life is complicated and some simplifications are moronic.

    The best simplification is:
    When an item is created faster than it is needed then it becomes easier to obtain.
    When an item is created slower than it is needed then it becomes harder to obtain.

  3. No doubt our new Government will try to outdo the Canadian government on granting permanent visas like tic tacs, once they get going.