David Rosenberg: Why immigration could be good for housing affordability in the long run
By David Rosenberg and Atakan Bakiskan
We have been vocal critics of Ottawa’s aggressive immigration policy from the perspective of creating further strains on a national housing market that is already stretched to the limit from an affordability standpoint due to a lack of supply. Creating a nation of renters because of a persistent multi-year housing bubble exacerbated by the immigration-fuelled boom in demand for residential real estate, is surely going to exert negative and unstable effects on the economic fabric and society as a whole.
It would be nice if the federal government began to focus its attention toward putting more emphasis on importing construction workers and skilled tradespeople, that much is for sure. After all, real residential investment is at -18.7 per cent year over year, and negative for seven quarters in a row — and all the while, Canada’s population and housing needs have been rising inexorably.
The Canada Mortgage and Housing Corp. (CMHC) estimates that Canada needs an additional 3.5 million units by 2030 to restore affordability — so the federal government would be well advised to ask immigrant applicants whether they know how to work with hammers and nails. The country also has a deficiency of health-care workers that should be more adequately addressed in this aggressive immigration policy, but we shall save that file for another day.
Before going down the rabbit hole of lamenting the excess demand effects on housing from the record levels of immigration that have boosted population growth to two per cent at an annual rate, far above historical norms and, outside of Iceland, at the very high end of the range in the industrialized world, the beneficial impact on Canada’s growth potential
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