Posthaste: New immigrants projected to make 680,000 home purchases over next five years
Canada’ five-year fixed mortgage rates fell around roughly 100 basis points from the turn of the year to recent lows, which analysts believe was behind the rebound in the housing market. Buying activity rose another 0.6 per cent in September to 512,000 units (seasonally-adjusted and annualized) — the highest level in 21 months and 6.6 per cent above the 10-year average.
Royal Bank of Canada senior economist Robert Hogue notes that conditions are ripe for another rally in housing prices after a pause earlier in the year.
“Demand-supply conditions have tightened up, and are gradually heating up prices. Low interest rates, strong labour markets and rapid population growth will continue to fuel demand in the period ahead,” said Hogue in a report. “Promises made during the federal election campaign could heat things up further.”
The influx of immigrants will also see demand for residential units soar. A new report by Royal Le Page out this morning says newcomers — those who arrived in the country within the past 10 years — already represent one in every five home buyers in the country.
“If the current international migration level is maintained, Canadian newcomers are expected to purchase 680,000 homes over the next five years,” Le Page said in a report. In 2018, international migration accounted for 80.5 per cent of Canada’s population growth according to Statistics Canada.
Only 32 per cent of newcomers own a home, compared to the national average of 68 per cent. “Of those who purchase a home, 51 per cent of newcomers buy a detached house, 18 per cent buy a condominium, 15 per cent buy a townhouse and 13 per cent buy a semi-detached house,” according to Le Page. Here’s what’s you need to know this morning:
Statistics Canada likely to report annual inflation rate rose to 2.1 per cent in September
Retail sales data out today
ATB Financial presents 2020 Economic Outlook with keynote speakers, Todd Hirsch, Chief Economist, ATB Financial, and Pierre Cleroux, Vice President, Research and Chief Economist, BDC in Calgary
Max Bell Foundation presents The Future of Energy in Canada with Martha Hall Findlay, CEO of Canada West Foundation in Calgary
Bruce Ralston, B.C. minister of jobs, trade and technology, joins Indigenous economic development leaders for an announcement regarding support for Indigenous businesses in Kamloop, B.C.
BMO & TMX Hemp & Medical Cannabis Conference, in London, U.K.
The Federal Reserve will release an updated Beige Book at 2:00 pm ET
Notable earnings: Kinder Morgan Canada, The A&W Revenue Royalties Income Fund, Netflix, Bank of America, IBM
Justin Trudeau may no longer be the flavour of the month, but he has presided over a strong job market. And that could still tilt the election the Liberals’ way.
Ridings where the NDP fared well in 2015 also seem to enjoy strong labour markets, but Conservative-favouring ridings have seen slower job growth, according to a new report.
“We find that recent labour market strength has been concentrated in certain areas of the 2015 electoral map. In particular, regions where the NDP or Bloc Quebecois were competitive, typically splitting with the Liberals, have seen substantial improvement, mostly in Quebec or B.C,” Indeed Hiring Lab said in a study out last week. “Meanwhile, there’s been more modest progress in areas the Liberals either swept or split with the Conservatives, primarily in Ontario and Atlantic Canada. Finally, the post oil-crash labour market malaise in Alberta and Saskatchewan has had solid Conservative regions lagging.”
The report noted that in August, the average unemployment rate over the previous 12 months in Liberal-NDP/Bloc regions was 2.1 percentage points lower than in December 2015, while other NDP-competitive areas also saw a substantial decline.
“Regions the Liberals swept or split with the Conservatives also made progress, but with declines closer to 1 percentage point. Unemployment was up slightly in Conservative areas,” the report noted.
It must also be pointed out, though, that Conservative-favouring Alberta and Saskatchewan are also going through a lean period mostly due to lower commodity prices, which would have skewed the results.