Immigration Key To Post-Pandemic Toronto Real Estate
Immigration may be Toronto real estate’s ace in the hole in a post-pandemic world, several market experts said on a recent real estate webinar.
“To me, the driver of residential real estate here is immigration,” Republic Developments President Matthew Young said on a Monday Bisnow webinar.
You can view Monday's full webinar here.
“We’re a welcoming economy. We’ve got a really cheap dollar. We’ve got public healthcare. People are going to look at Canada as a place that’s safe and welcoming," he said. "Canada, in my mind, only looks more attractive post-COVID than pre-COVID.”
On the issue of immigration, Canada stands in sharp contrast to U.S., where an executive order from President Donald Trump in late April placed a moratorium on immigration to that country.
In Canada, which welcomes 340,000 immigrants a year (close to 0.9% of the entire population), applications continue to be accepted for permanent residence.
A recent report by immigration law firm Green & Spiegel notes that 34,300 would-be immigrants have received invitations to apply so far in 2020. No fewer than 3,900 of those got ITAs just last week.
“You look at places like the U.S., where it almost seems they’re putting a clamp on their immigration, and people are going to look at Canada as a place that’s safe and welcoming,” Young said. “So I think long term, that bodes well for residential real estate here.”
The historical, stereotypical image of the new immigrant isn’t that of homeowner. But that’s just not accurate now — if it ever was. And it is especially not true in Toronto, said Colliers International VP, Private Capital Investment Group, Jeremiah Shamess.
“A tremendous amount of demand in the Toronto market has come from this immigration push. If you look at the historic numbers, Canada has let in 350,000 [yearly], 250,000 of those are coming into Ontario particularly," he said. "The strength of the Toronto market is in the strength of those immigration numbers.”
One difference between Canada and the United States’ approaches to immigration lies in the type of immigrants allowed entry. According to a recent Canadian Immigration Newsletter, 60% of new immigrants to Canada come from what is termed the “economic class,” meaning they meet certain monetary and educational guidelines for entry.
By comparison, only 10% of immigrants to the United States are classified as in that same economic class. Shamess said this unique Canadian approach to immigration applicants "may, in turn, help us grow our way out of this recession."
He predicts Canada’s annual immigration numbers will only increase in the future, with 400,000 or 500,000 annually a possibility.
“Which is only going to create a stronger thesis for why Toronto is doing well,” Shamess said. “To me, it’s a good news story that there was a spike in some of the entry numbers, and I hope to see those increase over the year once we deal with the COVID-19 situation.”
Innovation and Real Estate: Technology's Role In Shaping The Real Estate Industry of The Future is the topic of Bisnow's next Toronto webinar on Wednesday at 2 p.m.