Higher newcomer numbers are good news for the housing market, and a new federal plan points that way. Canada’s federal Immigration Minister, John McCallum, is expected to announce a ‘substantial’ increase in newcomers to Canada.
This post was first written in 2016. The names and figures below are from that time.
How much could newcomer numbers rise?
The plan is expected to raise the number of new immigrants coming to Canada from 300,000 to 450,000 for the next five years. That is a big jump. So it is worth asking what higher newcomer numbers mean for jobs, for the economy and, of course, for housing.
Canada is a country of immigrants. Also, an aging population and a shortage of workers are the key reasons to bring in more newcomers. In short, the country needs more people to keep the balance. Without them, it gets harder to fill jobs and to support public services as more people retire.
Where today’s newcomer numbers come from
There are many ways to come to Canada. For example, there are federal economic immigration programs processed through the Express Entry system. There are also programs at the provincial level, including the Quebec Skilled Worker program.
Even so, the bulk of new immigrants this year came through family reunification and refugee or humanitarian programs. By contrast, the Minister wants this ‘substantial’ increase to focus on economic programs, to fix labour shortages in the country. As a result, the mix behind the newcomer numbers may shift toward workers.
Can Canada absorb higher newcomer numbers?
Some experts have raised concerns about whether the system is ready to absorb these newcomers into the labour market. That is a fair question. Jobs, training and the recognition of skills all take time. Settlement services, schools and transit also need to keep pace with growth.
Having said that, Canada will still need a steady flow of newcomers. Besides becoming part of the workforce, their first and foremost need will be a home for themselves and their families. So there has been, and will remain for the foreseeable future, strong demand for housing. With higher newcomer numbers than ever, that demand may be even stronger.
Why newcomer numbers matter for the housing market
Experts in demographic studies say that population growth is not linear. Instead, it is exponential. That means as newcomers’ children grow up, they will also need homes of their own.
So it is all good news for the housing industries. They contribute billions of dollars to the country’s economy and create millions of jobs every year. In other words, rising newcomer numbers help builders, trades, lenders and many local businesses too.
Of course, more demand with too little supply can push prices up. I explain this in my post on how supply and demand shape home prices. You can also read about a later plan for over a million immigrants in three years.
What newcomer numbers mean for Mississauga
Mississauga and the rest of Peel Region have long been a first home for many new Canadians. Therefore, higher newcomer numbers tend to show up here quickly, first in rentals and then in first-time purchases.
Homeowners can expect steady demand when it is time to sell. Meanwhile, investors may see steady interest in rental units. As for newcomers themselves, it helps to learn the local market early and plan a path from renting to owning. A good first step is to build a Canadian credit history, save for a down payment and talk to a lender about pre-approval. Then, when the right home comes along, you are ready to act.
Sources for further reading
Please see these reports for further reference: CBC News on Canada’s immigration levels and CIC News on the Minister’s plan to increase immigration numbers. For current programs, visit the Government of Canada website.
Talk to a Mississauga real estate agent
Do you have questions about what this means for you? I am happy to help. I am also a certified PMP, and I enjoy helping newcomers plan their first home purchase. Please send me a message or call me on my direct line at 416 908 5600. A. Q. Mufti, Sales Representative, RE/MAX Real Estate Centre Inc., Brokerage.
Disclaimer: this article was published on 18 January 2025 and reflects the information available at that time. Interest rates, prices, and government programs change, so check the current position before acting on anything here. It is provided for information only and is not financial, mortgage, tax or legal advice. A. Q. Mufti is a registered Sales Representative with RE/MAX Real Estate Centre Inc., Brokerage, Ontario, Canada.
