By 2025, 1.45 million people will want to buy homes in Canada. Where will all these new homebuyers live?
Friday Mar 17th, 2023
BY 2025, 1.45 MILLION PEOPLE WILL WANT TO BUY HOMES IN CANADA. WHERE WILL ALL THESE NEW HOMEBUYERS LIVE?
Guido K / March 17,2023
The latest report from Statistics Canada has exposed a difficult and inescapable truth—in order to have both cheaper housing costs and greater immigration, there needs to be considerable reform. Sadly, we cannot expect the two at once without this action.
In order to welcome our influx of new residents, particularly in Vancouver and Toronto, we require fundamental modifications to ourzoning regulations.
BY 2025, 1.45 MILLION NEW PEOPLE WILL BUY HOMES.
According to StatsCan statistics, Canada will welcome approximately 1.45 million immigrants by 2025 - with hundreds of thousands being new Asian home buyers. These much-needed changes are necessary in order to accommodate the influx of newcomers into our beautiful country.
Despite their origin, all new permanent residents in Canada share the same necessity: a place to call home.
Prospective homeowners can still purchase a house, even with the new foreign buyer ban in place. Permanent residents are exempt from this restriction, so it's essential that you ensure your status meets these requirements before making any commitments.
The effects of Chinese and Indian immigration on Australian property prices are clear-cut, as confirmed by the 2020 research conducted by Morteza Moallemi and Daniel Melser in their paper titled "The Impact of Immigration on Housing Prices in Australia," published in Papers in Regional Science.
Although the research focused on Australia, Canada is facing similar issues when it comes to reasonable housing and adequate supply.
Canada is perilously close to becoming a country of unaffordable due to its current prerequisites.
The past two decades of data have proven that Canada is positioned for dramatic real estate appreciation, even without foreign investors or new immigrants. As a result, the average person may find it difficult to purchase their dream home in this increasingly expensive market.
Year by year, our stringent zoning regulations and cost-effective financing pushed Canadian household debt levels higher than ever before, making us one of the world's most expensive countries in which to live.
January 2023 saw the Canadian Real Estate Association report a staggering average national home price of $612,000 — a full 10 times higher than the median household income after taxes had been calculated.
Despite the plummeting of immigration, population growth, and foreign buying during the pandemic, we witnessed a remarkable surge in prices.
Despite the significant price drops since COVID-19 began, have markets retaliated enough to serve nearly 1.5 million additional inhabitants?
I strongly disagree.
It is essential that governments at all levels adopt immediate and decisive measures to construct substantial housing, as well as address the dearth of medium-density and high-density housing in our metropolitan areas.
THE LAND OF ABANDONED HOUSES
Increasingly, Canada is becoming known as the land of empty houses. That’s what you might conclude from the comments Paul Smetanin, chief executive officer of the Canadian Centre for Economic Analysis, made to the Globe and Mail.
A staggering 478,000 people have vanished from a landmass representing 58 percent of Toronto's region since 2001, according to the findings of Smetanin.
So, who or what is to blame for the housing crisis? Surprisingly, it's not foreign buyers leaving their homes vacant. Instead, we can attribute it to empty nesters living in excessively large residences that don't cater to their needs; as Smetanin describes them "over-housed". For example, there are two million unused bedrooms in Toronto and five million across the entire Golden Horseshoe region!
Contrary to popular belief, empty nesters are not the culprits in this situation. The zoning regulations that restrict two-thirds of the city's residential land to one home per building should shoulder much of the blame.
Toronto is not alone in this dilemma--Vancouver also faces the struggle to change their development patterns and provide a comprehensive selection of housing options for individuals from all financial backgrounds.
WHAT OPTIONS ARE AVAILABLE TO US?
Zoning regulations can be an effective solution to address the housing shortage and affordability crisis that plagues many cities.
In a July 2020 report, the Toronto Regional Real Estate Board found that municipal zoning restrictions have left that city devoid of a variety of housing. Instead, most urban areas consist of low-density single-family homes.
The report suggested that the missing middle be resolved with mid-rise and medium-density homes. It noted, "With the allowance of secondary units in all Toronto neighborhoods, 300,000 to 400,000 additional units could easily be included." Consequently, this would provide a quick solution to the lack of housing.
The current state of land use has called into question the need for more extraordinary changes than just rezoning areas already being used as housing. Two University of British Columbia professors advocate that it's become necessary to convert $20 billion worth of city-owned lands, such as golf courses and nature parks, into affordable housing.
It is essential for Toronto and Vancouver to create new strategies, regardless of their particular regulations. In order to avoid depopulation, these fresh policies must bring more housing units and inhabitants into the cities.
By revitalizing zoning policies, these cities can form more affordable housing options, stimulating neighborhoods, and flourishing communities.