Last year the number of nonpermanent residents in Canada weighed in at 891,000 — more than twice the total in 2006. This number will only grow as Canada welcomes in an increasing number of foreign workers over the next few years, ultimately leading to increased demand for housing, which will bolster the real estate sector as well as contribute to the development and stability of Canada’s economy.
Canada is Drawing in Highly Skilled Professionals
As Canada’s economy continues to grow — and Canada remains one of the most desirable countries in which to live — more immigrants are seeking opportunities here. Foreign workers brought into the Canadian market are highly skilled professionals: They are often doctors, designers and engineers. Not only will these workers contribute to the robustness of the economy, but they will also help the real estate market as they significantly increase demand for rental properties, resale homes and new developments.
By welcoming foreign professionals, Canada hopes to become a leader of development and innovation. The Canadian government is now staving off an aging population and capitalizing on the economic benefits foreign works bring to our country. It should be noted that very few of these foreign professionals are investors. For the most part, they are end users who will be contributing tax money and investing in local economies.
The Foreign Impact on the Real Estate Market
Foreign workers are going to increase demand in the rental market. This will contribute to lower vacancy rates and assist in pushing average rents higher. Landlords will find their rentals not only more profitable, but also easier to fill with stable, qualified applicants.
Long term, many foreign workers are likely going to decide to stay in Canada. As highly skilled professionals, they will likely want to purchase homes — contributing significant demand to the resale housing market in the Greater Golden Horseshoe, which includes Hamilton. This will lead to less supply on the market and assist in growing real estate values over the next 5 years.
More people are moving to the economic centers of Canada, including Canadian citizens. This economic center is rapidly starting to include Hamilton as we capture overflow from more expensive areas. As this occurs, rental prices and home prices are naturally going to rise.
A growing supply and demand imbalance has been one of the most significant factors behind the record growth in home prices we have witnessed over the last 5 years. Temporary workers are often a forgotten piece to this puzzle when analysts in the media attempt to measure demand for the real estate market.
The millions of Temporary foreign workers we expect to arrive in the next decade are just one more reason we remain confident that home prices stand to appreciate further in the years to come.