New Canadians To Buy 680,000 Homes
A recent report, published by Royal LePage, stated that 680,000 homes will be purchased by new Canadians over the next 5 years.
Homeownership in Canada
In Canada, the homeownership rate is 68%, with new Canadians rating at 32%. Typically, new Canadians wait 3 years after arriving in Canada to purchase a home. Before that they are renting properties, allowing for a 3 year lag in time which is great news for investors. This gives us an influx of new individuals that are renting and, lucky for us, most of them are coming to the Greater Toronto Area.
The GTA is the largest population center in Canada. We are responsible for 20% of the GDP. Toronto has the economic growth engine, this is where the jobs are, and is the most multicultural city in the world. No matter where these new Canadians are coming from, they can find a place in Toronto where they will be comfortable, despite the cold weather.
Immigration Over The Years
This year Canada welcomed 350,000 new immigrants and that number continues to rise. In 2020, we are expecting 360,000 new immigrants. In 2021, we expect 370,000. This means that over the next 5 years, we’re looking at about 1,750,000 people coming to Canada. Ontario will receive about 45% of the new comers, and the GTA will receive 77% of those coming to Ontario. About 35% of all immigrants coming to Canada will be looking to live in the GTA, which works out to about 110,000-115,000 people per year.
For investors, there is a simple conclusion after looking at these stats: they will need somewhere to live and most will be renting for 3 years before purchasing and investing in their own property. We are given a whole new pipeline of people that will need roofs over their heads.
Building Their Generational Wealth
Less than 15% of immigrants are refugees and about 55% of new Canadians are economic immigrants. These are skilled people coming into Canada because we need them for their trades and skills. Around 75% of them are bringing money into the country as well. But the main reason people decide to more to Canada is for their families. They’re coming here for the opportunity our country provides. They have savings, want to make an investment in this country, and want to establish themselves here.
Once they have settled into the country, they will be buying their own homes, and maybe 5 years later they are going to start looking for investment properties. They’ll see the need for roofs over people’s heads and the opportunities in real estate investments in Toronto. Not only will they look to build their investment portfolio, but they’ll also be establishing something for their children to live in later on, as freehold homes are basically non-existent or a rarity in North America.
Just like everyone else, these individuals are looking for affordable options. They’ll begin with an entry level home at under half a million, which is quite rare to find in Toronto. You’d most likely be purchasing a studio apartment or a very small 1 bedroom. At this point, you’d be looking at $500,000 to $1,000,000. Eventually they will move up the property chain, as all of us do when we start a family, looking for bigger properties.
Beat The Supply Crunch
We know there is a limited amount of real estate, we know there is a consistent flow of new Canadians arriving over the next few years, and we know they’ll also be looking to build their real estate investment portfolio.
If you want to get on the train and beat the supply crunch of new immigrants coming here and get into the investment condo world, email contact@alexjwilson.com or you can give me a call/text me at (416) 996-5181. We’d be happy to help you build your financial portfolio, financial freedom, and generational wealth.