Post Date: Thursday, July 9, 2009
New Immigrants Driving Housing Demand,
according to Scotia EconomicsTORONTO, July 9 /CNW/ –
Canadian immigrants are narrowing the homeownership gap with their Canadian-born counterparts, according to the latest Real Estate Trends report released today by Scotia Economics. The most recent census data available show that in 2006, almost 72 per cent of immigrants lived in a dwelling owned by a household member, up from 68 per cent in 2001. The comparable share for the Canadian-born population rose a more modest two percentage points over this period, from 73 per cent to 75 per cent. “Homeownership tends to increase the longer one has lived in Canada, with the majority of new arrivals first settling in rental accommodation,” said Adrienne Warren, Senior Economist, Scotia Economics. “Over time, immigrant families eventually make the move to homeownership, at rates similar to the Canadian-born population. However, between 2001 and 2006, the homeownership rate rose for all immigrant groups, regardless of how long they had resided in Canada. The biggest increase was among those living in Canada for less than 10 years. “As recent immigrants to Canada make the transition from renter to owner, they will increasingly drive housing demand,” states Ms. Warren. According to the report, the faster transition to homeownership has been supported in part by strong labour markets. The employment rate for core working-age recent immigrants jumped 3 1/2 percentage points between 2001 and 2006 (to 67.0 per cent). This was faster than the 1 1/2 percentage point gain among their Canadian-born counterparts (to 82.4 per cent). The employment rate for all immigrants also increased over this period, but by a more modest one percentage point (to 77.5 per cent). “The better labour market performance of recent immigrants may reflect a favourable skills mix, with many employed in high-growth industries such as engineering, construction and skilled trades. It may also reflect a greater geographic mobility to meet shifting regional labour requirements,” said Ms. Warren.The report also states that, of the more than one million immigrants that came to Canada between 2001 and 2006, 69 per cent settled in the three largest census metropolitan areas (CMAs) – Toronto, Montreal and Vancouver – and their surrounding municipalities. Meanwhile, a growing proportion (28 per cent) of immigrants settled in smaller CMAs, most notably Calgary, Ottawa-Gatineau, Edmonton, Winnipeg, Hamilton and Kitchener. Less than three per cent chose to live in a rural area. “Given Canada’s aging population and relatively low fertility rates, longer-term household formation and housing needs will be largely determined by immigration,” concluded Ms. Warren. “Using standard assumptions regarding immigration, fertility and mortality rates, the share of Canada’s population growth coming from immigration could rise to three-quarters a decade from now, up from 60-65 per cent today and almost all by 2030. Most of this growth will be in Canada’s urban areas.” Scotia Economics provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.