Canada has welcomed well over 2 million immigrants in the past two years (2022, 2023) and proposes to increase the number of permanent residents in Canada from 465,000 in 2023 to 485,000 in 2024 and 500,000 in 2025 (Canada.ca/en/immigration-refugees-citizenship/corporate/transparency/consultations/2023).
Housing remains a challenge as only 399,000 new household units were added to the market in the previous 24 months (StatsCan), contrasting sharply with the 954,241 new households needing housing in the same time period.
Homeowners have been holding on, waiting for the forecasted rate cuts for 2024, but Scotiabank’s chief economist, Jean-Francois Perrault cautioned against early rate cuts in an interview last month on Scotiabank Perspectives Podcast.
“Inflation is kind of in a 3.5-4% range, so not quite at the top end of where the Bank of Canada’s range,” he says. “And so that’s the problem. That’s what the Bank of Canada is trying to get down – that stickiness at that level of 3.5 – 4%. On these measures the Bank of Canada really cares about is what’s preventing them from, you know, signaling that they’re happy with the inflation outcomes, that they are comfortable that inflation is going to go down to 2%. You know, we’re still some distance away from where that needs to be.”
In addition to an overall housing shortage in Canada, the increase to the labour market can also signal increased cost for rental housing for individuals not in a financial position to enter the homeownership market.
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