New Canadians account for one in five of all housing purchases and are expected to buoy the market in the Toronto region and across Canada over the next several years, says a new survey for Royal LePage.

“Ontario and specifically the Greater Toronto Area has greatly benefited from international migration to Canada,” said Chris Slightham, president of Royal LePage Signature Realty. 

Slightham suggested that the demand will support increases in residential real estate values in Toronto and surrounding areas.

“Neighbourhoods across the greater region are blossoming with the continued influx of newcomers who are looking for good schools and job opportunities in thriving communities,” added Slightham, in a media release.

He said the combined impacts of a growing economy and strong jobs market along with burgeoning demand for affordable housing among younger and new Canadians makes it crucial that housing supply keeps pace in a market where supply is already tight.

He said demand can be met through housing policies that encourage sustainable development with a focus on protecting and developing green spaces in urban centres.

According to the August 2019 survey of 1,500 immigrants who arrived in Canada within the past decade, newcomers represent 21% of all home buyers, with the group expected to acquire 680,000 properties over the next five years. In 2018, international migration accounted for 80.5% of Canada’s population growth, Statistics Canada data shows.

Despite expressing a strong desire to own a home, the ownership rate for newcomers is only 32% versus 68% for all Canadians, according to the Royal LePage Newcomer Survey released on October 16th. 

In Ontario, which accounts for about 46% of all international migration to Canada, the rate for the group is three percentage points lower, reflecting in part the high cost of home ownership in the GTA.

Newcomers in Ontario account for 21% of all home buyers in the province and are projected to purchase 286,000 homes over the next five years at the current rate of migration.

Demand for homes in Toronto continues to grow amid lower interest rates and limited supply — and as buyers adjust to stricter mortgage-lending rules. The average resale home price for all housing types in the Toronto region rose 5.8% year over year in September to $843,115 as the number of new listings fell 1.9% compared with a year ago, the Toronto Real Estate Board said.

With real estate prices roughly half of the cost of Toronto and a third the cost of Vancouver, Ottawa is becoming an attractive destination for newcomers to Canada, according to the survey. 

“The demand from both newcomers and first-time home buyers has put considerable upward price pressure on inventory between $300,000 and $500,000,” added Jason Ralph, managing partner, Royal LePage Team Realty in Ottawa.

Other Survey Highlights:

  • 31% of newcomers have a family with children
  • 25% are students
  • 20% are sole applicants
  • 75% of newcomers arrive with savings towards purchasing a property however on average they wait 3 years before purchasing
  • 51% of newcomers purchase a detached home
  • 18% of newcomers purchase a condominium
  • 15% of newcomers purchase a townhouse 
  • 13% of newcomers purchase a semi-detached house

Nationally, 82% of respondents remain in the region of their first residence.

Source: The Star