Banks will not likely be able to accommodate the surge of new arrivals over the next few years
With the federal government having recently boosted its immigration targets to accommodate up to 500,000 newcomers to Canada annually by 2025, it will be up to non-bank lenders to fill in the gaps as banks will not likely be able to accommodate all of these new arrivals.
That’s according to Christine Xu, president of MoneyBroker Canada, who noted that the number of new arrivals from 2023 to 2025 will essentially double the country’s non-Canada-born population – a trend that bears close watching.
“Within the next two years, we’re going to have 1.5 million new immigrants coming into Canada,” Xu said in a recent interview with Canadian Mortgage Professional. “That’s a huge, huge number. Where are they going to live? They’ll need to either buy property or rent property – and the rental market is already going up quite a bit.”
The Canadian population clocked in at 39,566,248 on January 1 this year, with more than 1 million new arrivals registered over the course of 2022, according to Statistics Canada.https://t.co/XgbSgeR7Fd#mortgage #mortgagenews #housingmarket #immigration
— Canadian Mortgage Professional Magazine (@CMPmagazine) March 23, 2023
The role of the broker in this evolving environment will be to secure mortgages through alternative or private channels, as it’s not likely that newcomers will be able to secure loans from banks, Xu said.
Additionally, the value of real estate is still likely to go up in the near future, particularly in the largest cities.
“Location is very important because, especially for the new immigrants coming in, their first settlement will be [on] the GTA, the GVA,” Xu said. “Those are the major markets where they can find employment.”
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