Supply and demand is a natural phenomenon that dictates market prices, and real estate is no different. When more people want homes than there are homes for sale, prices tend to rise. In Canada, one of the biggest drivers of housing demand is immigration.
This post was first published on April 15, 2021. The figures below are from that time.
How supply and demand sets home prices
Think of a home sale as a simple meeting of buyers and sellers. If ten buyers want the same house, the seller can hold firm on price. However, if ten houses compete for one buyer, the buyer has the upper hand. That is supply and demand at work.
Housing supply is slow to change. It takes years to plan, approve and build new homes. Meanwhile, demand can change quickly with jobs, interest rates and population growth. So when demand jumps and supply lags, prices usually climb.
This is why it helps to watch both sides of the market. New listings show the supply side. Sales and population growth show the demand side. Together, they explain most price moves.
Why Canada needs newcomers
Canada is the envy of the world for her immigration policies. People from all walks of life and varying backgrounds of religion, culture, colour and language live in harmony without prejudice. And they feel pride in calling their newly adopted home the best place in the world to live.
Canada needs immigrants. It cannot sustain its growth without a constant flow of new immigration, and the national policies on immigration reflect this need in their plans. For the housing market, this steady growth adds to demand every year. In turn, it keeps supply and demand under pressure.
Immigration targets and housing supply and demand
Canada has been increasing its new immigrant target every year. It rose from 241,000 in 2015 to 341,000 in 2019. You can learn more about immigration plans on the Government of Canada website.
According to that day’s Globe and Mail report:
“The federal government plans to grant permanent residency to more than 90,000 temporary foreign workers and graduated international students as part of its goal to admit 401,000 immigrants this year.”
Newly arrived immigrants need a home to live in. Housing supply was already facing supply and demand challenges. So new arrivals were set to squeeze supply further. Eventually, that could help keep housing prices on an upward trend for the foreseeable future.
What this means for buyers in Mississauga and the GTA
Mississauga and the wider GTA welcome many newcomers every year. Many start by renting, then buy once they have work and savings. Therefore, steady immigration supports demand for both rentals and homes to buy.
For buyers, the lesson is simple. Waiting for a big drop in prices can be risky when supply and demand stay tight. Instead, focus on what you can control:
- Know your budget and get a mortgage pre-approval.
- Choose neighbourhoods that fit your work, school and family needs.
- Be ready to act when the right home appears.
- Think long term, since most people hold a home for many years.
For sellers, strong demand can be good news. Still, the right price and a well-prepared home matter in every market. You can also check population data on Statistics Canada to see how your area is growing.
Keep reading
For more on this topic, read about the plan to welcome over a million immigrants in three years. You can also see why higher newcomer numbers matter for the housing market, and my ideas on a practical solution to the housing crisis.
If you like what you read, I would be grateful if you left a Google Review:
Talk to a Mississauga real estate agent
Do you have questions about buying, selling or planning your next move? I am happy to help. You can reach me through my contact page or call me directly 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.
