Canada Residential Real Estate Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)
The Canada Residential Real Estate Market is anticipated to register a CAGR of more than 10% over the forecast period.
Key HighlightsImmigration has been a major source of economic growth for Canada's successive governments. With the pandemic forcing aged Canadians to retire early, luring immigrants has become increasingly crucial. In addition, the country focuses on high-skilled immigrants, who are more likely to bring money and earn enough to compete for coveted housing. Low mortgage rates and a scarcity of housing have pushed up housing expenses. Another reason was migration, particularly during pre-pandemic. Immigrants are more likely to buy in large urban areas, such as greater Toronto and Vancouver, where home prices have risen above CAD 1.12 million (USD 88,000), according to Statistics Canada.
In 2021, the Canadian government achieved its lofty goal of admitting 401,000 new permanent citizens. However, it relied primarily on migrants who were already in the nation on a temporary basis to do this. To meet the aim of 411,000 immigrants by 2022, the government is anticipated to attract more immigrants from abroad.
As a result, the number of newcomers who set foot on Canadian territory and begin seeking accommodation is expected to increase. This influx of immigrants will have the greatest influence on the rental market, as newcomers are more likely to rent in their first few years in the nation. The great majority of newcomers are settling in Canada's biggest cities, such as Toronto, Vancouver, and Montreal, adding to the housing shortage.
Demographic Factors are Driving the MarketThe market will continue to see a lot of activity as Millennials' housing needs change, especially for homes that are suitable for families. In recent years, millennials (those in their mid-20s to early-40s) have swelled the numbers of Canadians in their prime home-buying years. In 2021, Canada had 10.5 million persons aged 25 to 44 years. In the last five years, this number has increased by more than 800,000 (or 8.3%). Millennials will continue to be a dominant influence in the home market in 2022 and beyond if past ownership patterns hold. Between the ages of 25 and 29 (40%) and 40 and 44 (63%), ownership rates often grow dramatically. Millennials will continue to be the most common first-time homebuyers, as well as a growing number of move-up buyers.
The population of Canada is expected to reach 38.07 million in 2021, an increase of 0.86% from 37.74 million in 2020. Canada is ranked 122nd in terms of population growth rate and 38th overall in terms of population. In Canada, there will be 0.39 million births in 2021. That amounts to 1,061, which is rated 65th per day. In 1000 people, there are 10.18 births on average. In Canada, there will be 0.3 million fatalities in 2021. That works out to 821 daily, which ranks 33rd. In 1000 people, there are 7.88 deaths on average. In urban regions, there are 30.97 million people or 81.65% of the total population of Canada. In terms of urbanization, Canada is placed 60th.
As mortgage rates plummeted to historically low levels and competition for entry-level property reduced, young people saw an opening and took advantage of it. With work-from-home becoming a daily reality, the living situation for some young adults sharing with parents, siblings, or roommates became uncomfortably congested. In the current market, the option to purchase 500 square feet of personal space was more than viable for most people. Historically low-interest rates are making it more attractive for young people to invest in housing across all markets.
Competitive LandscapeCanada's Residential Real Estate Market is fragmented in nature with a huge number of global, regional and local players in the market. Some of the major companies in the market include Amacon, Aquilini Development, Concert Properties Ltd, and Century 21 Canada. The rising potential in residential real estate due to increased immigration and the development of infrastructure across various cities is driving the market and creating opportunities for the players to invest in the market.
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