The scarcity of housing for new arrivals is a crisis that needs to be resolved quickly
The Canadian housing market is only as strong as its population – which is why for Francis Gosselin, consulting economist at nesto, the country can do much more to make itself even more enticing for foreign nationals who are looking to put down roots.
“For some reason, we’re seemingly having a hard time integrating [newcomers] fully, and I find it unfortunate that Canada is perceived as a welcoming land, a welcoming country, territory — and then people arrive, and they can’t find a place to stay,” Gosselin told Canadian Mortgage Professional.
The situation essentially over-promises and under-delivers for Canada’s new arrivals, “and that’s not very good for our international reputation,” he stressed. “We need to address and fix that quickly over the next year or two.”
As four million Canadians enter the homebuying pool between now and 2027, and immigration boosts potential buyers, the housing market is poised for resurgence. 📈
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 20, 2023
Read more: https://t.co/8WJFAQYBfg#MortgageIndustry #HousingMarket #HomeSales #Homebuyers #MortgageBroker pic.twitter.com/Xu5slezFYT
In its latest estimates, Canada Mortgage and Housing Corporation (CMHC) said that at least 5.8 million more homes need to be built by 2023 to ensure improved housing affordability for Canadians and new arrivals alike.
Gosselin said that governments, especially the municipal level, need to step up their efforts to compensate for the current shortfall.
“2030 is a long time, but I think we need to see some action, short-term – and by that, I mean that governments need to ease up on zoning and permits,” Gosselin said. “For everyone who wants to build or renovate or make new supply, it’s very difficult right now.”
The diversity of housing types in ongoing construction programs is to be lauded, but Gosselin said that one asset class needs particular attention when it comes to developing new supply.
“I see right now in Canada an obsession over affordable and social housing – which is fine, because we need those. But we also need just regular houses at market prices, for people who are making a good living and are able to pay a regular mortgage.”
“We’re putting all our money in one basket of social and affordable housing, and I’m not saying it’s not needed there, but it’s also needed elsewhere in the market.”
Listen now: What are economic trends telling us about the mortgage market’s future?
