Housing market will stay strong: report
Fears of a long and sharp downturn in the housing market are highly exaggerated and premature, particularly for York Region, according to a new CIBC study.
Real estate markets will be supported in the coming decade by demographic forces such as population growth and immigration, CIBC deputy chief economist Benjamin Tal said in his report.
Ontario is second only to British Columbia in terms of projected growth in housing demand due to demographics in the coming decade, Mr. Tal said.
“And within Ontario, I think York Region will see some of the fastest demographically induced growth, mainly due to immigration.”
Overall, the next decade will see annual population growth of 0.9 per cent, Mr. Tal said.
That’s in line with growth seen in the past decade.
“From a housing market perspective, what counts is not only the change in population of a given age group, but, more importantly, the level of housing market activity among those groups,” he said.
“In other words, the group that is most likely to buy a house will grow faster in the coming decade.”
Most of the growth in population is due to immigration, which is likely to outpace currently projected growth due to changes in immigration policy, he said.
“What’s more, there is a significant jump in the home ownership rate among immigrants as they pass the three-year mark,” Mr. Tal said, adding the propensity among immigrants to own a house after 10 years in Canada is higher than among Canadians born in Canada.
