The Canadian population grew 1.4% year-over-year in July, marking the fastest pace of growth since the 1990’s. It was also the fastest pace of growth amongst the G-7.
The rapid growth has been fuelled primarily by immigrants, with the Liberal Government pumping in 313,580 people in the past year, the most on record for a single year.
Given the large increase in new immigrants and overall population growth, it shouldn’t be a surprise that the country is mired in a housing shortage. However, as I have written before, migration flows are largely dependent on the overall strength of the economy, which ironically hinges on the strength of the housing market.
Further, the last time population growth was this strong the housing bubble in Canada burst, leading to not only a steep decline in home prices but also in population growth.
We often hear the argument that population growth has been responsible for the sharp rise in BC home prices, however, when looking at the most recent data from Stats Canada it’s evident that population growth really hasn’t been anything special in BC.
However, it is certainly true that both interprovincial migration and non-permanent resident growth into BC has been strong, driving much of the recent growth. Again, caution being that these flows can easily reverse should the economy and the labour market slow.
At least property developers here in Vancouver are doing their best to keep pace with the growth in population. This should bring relief to home buyers.