Non-permanent residents shape housing market

Thursday, April 30, 2015

According to a new CIBC World Markets report, non-permanent residents (NPRs) of Canada are reshaping the country’s housing market. The report, which notes that NPRs have now reached record levels, at 770,000 people, says this demographic is a major force capable of influencing macro-economic variables like housing activity.

Author of the report Benjamin Tal says that Ontario and British Columbia have seen the largest impacts of NPRs on their populations. The report states that “if it were not for the rise in NPRs, Ontario would have experienced a decline of 120,000 in the 25-44 age group” since 2006. In British Columbia, the rise in NPRs accounts for all of the recent growth in the 25-44 age group.

Tal goes on to say that it is no “coincidence that those two provinces are also the ones to experience long-lasting strong housing market activity. In fact, given the above demographic picture, it is fair to assume that NPRs play an important role in demand for rental units in both provinces – a factor that is largely behind the recent boom in the condo market in cities like Toronto and Vancouver.”

Figures in Tal’s analysis are drawn from Statistics Canada, but he believes that actual numbers may be much higher than indicated. Moving forward, however, he points out that recent temporary foreign worker program changes may reduce the number of valid visa holders, thus impacting overall NPR numbers.

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