Earlier in 2023, Canada’s official population eclipsed 40 million, a historic milestone fueled by steady population growth from an influx in immigration. Over the past year, the population increased by over 1 million, with immigration accounting for 95.6% of that growth.
The country’s population growth holds promise for a brighter future, but it also presents significant challenges. As more individuals choose to establish themselves in thriving urban hubs rather than rural regions, major cities are grappling with the strain of limited housing supply and escalating affordability concerns. Consequently, a crucial question arises: where will everyone find suitable living spaces?
The pressing need for housing across the country underscores the urgency of constructing new developments at a rapid pace. The truth is, we are already lagging behind in meeting this demand and must now endeavor to bridge this gap without delay.
Are Canadian immigration levels increasing?
Newcomers are attracted to Canada for various reasons, including job opportunities, first-rate education, universal healthcare, a diverse population, safety, and relative economic stability. Canada leads the G7 countries in population growth, surpassing rates not seen in the country since the 1950s, according to Statistics Canada. International immigration accounted for almost all that new growth, and Canadian immigration levels are only projected to rise. Under Canada’s Immigration Levels Plan, the country will welcome nearly 500,000 immigrants per year by 2025.
Immigration is the primary way the federal government deals with the country’s demographic challenges. Between an aging population, a national birth rate that has been on the decline since the 1960s, and a severe labour shortage that is only expected to worsen, Canada is using immigration as a critical solution.
Immigrants help boost Canada’s economy through their contributions in consumer spending, entrepreneurship, filling job vacancies, and tax revenue. Their arrival stimulates the economy through the purchase of goods and services, as well as spending on housing and transportation. Immigrants not only aid in filling the gaps in our labour force, but many newcomers become entrepreneurs, further fuelling economic growth and employment.
Is Canada facing a severe housing shortage?
Canada, being a vast nation, witnesses a strong inclination among newcomers to settle in its expansive urban centres. Ontario stands as the primary immigration destination for recent immigrants in Canada, followed by Quebec and British Columbia. Notably, the city of Toronto alone welcomed a staggering 216,600 immigrants last year. Although the Greater Toronto Area has experienced a 130% increase in new condominium supply over the past decade, there is still a pressing need to bridge the gap and meet the demand adequately.
With an influx of people to urban areas, building high-density housing becomes incredibly important as development land becomes scarce and costly. Despite leading the G7 countries in population growth, Canada has the lowest average housing supply per capita. There is clearly a supply and demand imbalance that will only be further amplified with the continuous increase in immigration levels. New developments must catch up to the current deficit and then, at minimum, grow alongside the population.
Ontario, Canada’s most populated province, has one of the lowest numbers of homes per capita compared to other provinces. A recent study suggests that Ontario needs to build a staggering 1 million new homes over the next decade to keep up with the expected 2.27 million additional people who will live in the province between now and then. A mix of housing, including multi-residential developments, is needed to help fill the gap.
Yet, at a national level, about 188,000 new homes are built yearly—with about 70,000 of those in Ontario—which means by 2024, housing starts need to increase by at least 50% to keep pace with population growth.
Insufficient housing supply exerts significant upward pressure on home prices, rendering homeownership unattainable for a substantial portion of the population. Projections indicate that Canada is expected to construct 2.3 million housing units by 2030, yet an additional 3.5 million units are required to reinstate affordability. The demand for increased housing in the country has reached a critical juncture.
New development is crucial to address the housing crisis
To address the housing needs and accommodate the ongoing population growth, new development of housing is more critical now than ever. Developers play a crucial role in facilitating the construction of new homes and ensuring the provision of an appropriate housing mix that aligns with the diverse demands of the population. Their contribution is vital in meeting the evolving housing requirements of the community.
If current immigration levels stay in place, Canada’s population is trending to reach the 50-million mark by 2043 —that’s just 20 years from now. With long-term steady growth on the horizon, new housing development has reached an unprecedented level of importance.
Opportunity to be part of the solution
Equiton’s new developments, like its Toronto multi-residential building, Vicinity Condos, are helping to meet the housing need. With a turnaround cycle of 3.25 years, much shorter than typical development projects that average 5-7 years to complete, or even longer, investors can be part of the solution today and make an impact significantly faster.
Investors can also participate in Equiton’s other exciting urban projects, which add much needed units to the insufficient housing supply. In Ottawa’s rapidly transforming Vanier neighborhood, Riverain District, a large-scale, multi-phase development, is projected to encompass approximately 1,000 rental units. Additionally, the Toronto Sandstones Condo development will add roughly 300 modern residential units to the housing mix. Equiton’s new developments present an incredible opportunity for investors to benefit from an expertly managed project that offers the potential for high returns on their investment. As an investor, you can support the need for new housing and benefit from these strong investment opportunities.