Immigrants, workers and refugees are investing in their new Canadian lives and having a significant effect on real estate demand in Western provinces, finds Royal LePage
Newcomers to Canada are moving the dial on residential real estate demand, with one in every five Canadian homes purchased by a buyer who arrived in the past 10 years, according to a survey by national real estate brokerage Royal LePage.
The study of 1,500 newcomers to Canada, all of whom arrived in the past decade, included immigrants, refugees, those on working visas and international students.
"In addition to supporting Canada's economic growth, newcomers to Canada are vital to the health of our national real estate market," said Phil Soper, president and CEO, Royal LePage. "The combined demand for affordable housing among younger Canadians and new Canadians can be met through housing policies that encourage smart and sustainable development, with a focus on protecting and developing green spaces in our urban centres. Canada's economy and labour markets are expanding and it is crucial that housing supply keeps pace."
Eighty-six per cent of Canadian newcomers said they see real estate as a good investment and 75 per cent arrive with savings to help purchase a property. The study showed that of the newcomers that purchased a home, the average time was three years after arriving in Canada.
“It is not surprising that newcomers see a home in Canada as a good investment. Having lived abroad myself, I have seen first-hand the challenges of relocating a family to a new world. It takes courage and commitment. Newcomers are doing more than investing in Canadian real estate, they are investing in their family's future,” added Soper.
Royal LePage said in its report, “Despite the desire to purchase a home, the homeownership rate of newcomers is only 32 per cent. The overall homeownership rate for all Canadians is 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.”
If the current international migration level is maintained, Canadian newcomers are expected to purchase 680,000 homes over the next five years, said Royal LePage.
Royal LePage reported, “Alberta newcomers have a significantly high homeownership rate with 45 per cent owning their home. They are the most likely to believe that homeownership is a good financial investment (90 per cent). Newcomers represent 18 per cent of all home buyers in the province15 and they are projected to purchase 76,000 homes in the region over the next five years at the current rate of international migration.”
Corinne Lyall, broker and owner, Royal LePage Benchmark, said, “Alberta is particularly appealing to newcomers from all over the world, and already established Canadians who wish to migrate to the province. Calgary has a truly welcoming attitude. It is a relatively young city so the majority of the population was not born here. There is a lot of support for newcomers, along with a real sense of community and love for the area."
The brokerage reported that, upon arriving in Canada, 19 per cent of Alberta newcomers own their first place of residence, 55 per cent rent, and 13 per cent live with family or friends.
Saskatchewan and Manitoba
The two Prairie provinces, like Alberta, attract eight per cent of Canada’s international migrants, and 41 per cent of newcomers purchase their home within 10 years. Upon arriving in the province, 62 per cent of newcomers rent their first home, 20 per cent purchase and 17 per cent live with family or friends.
“Affordability reigns in this region of Canada,” said Michael Froese, managing partner, Royal LePage Prime Real Estate. “Newcomers come to the Prairies because the region can offer a great lifestyle on an affordable budget. It’s particularly appealing for newcomers who arrive as a family or those looking to start a family.”
Royal LePage said, “Newcomers are projected to purchase 71,000 homes over the next five years at the current rate of international migration. Of those who purchase a home, the average duration prior to purchasing is three years.”
The brokerage added that, similar to the national average, most newcomers in the Prairies arrive as a family with children (32 per cent). Eighty-six per cent believe that homeownership is a good financial investment.
In British Columbia, the homeownership rate among newcomers was the same as the national figure, at 32 per cent, and the figure was the same for newcomers living in Greater Vancouver. But the proportion of newcomers to British Columbia having enough funds to help buy a home was higher than the national figure, at 89 per cent.
Royal LePage added, “Consumer confidence in the province's real estate market is healthy, as 85 per cent of respondents in British Columbia believe that homeownership is a good financial investment. Eighty-six per cent of newcomers in British Columbia remain in their first city or region of residence. Currently, newcomers represent 15 per cent of all home buyers in the province and they are projected to purchase 91,000 homes over the next five years at the current rate of international migration.”