Immigration Boosting Canada’s Housing Market

New data issued by the Statistics Canada and Canada Mortgage and Housing Corporation (CMHC) highlights the booming period which Canadian housing is experiencing. Record numbers of people are opting to pursue a new life in Canada, thus contributing to the growth in the housing industry.

With Canada emerging as a popular migrant destination, the country has highlighted skilled workers as a key group, to attract and news of the housing boom will only go towards supporting this.

Immigration is playing a key role in the current housing market of Canada. Not only does the influx of people result in a higher demand for accommodation but it seems that such work is being sourced to migrants with expertise in such fields in order to meet the growing demands.

The recent report which focuses on the effects of the strengthening housing situation in particular, forecasts that 525 single detached starts, 20 semi-detached units, 40 apartment condominium ownership units, and 130 apartment rental units have /will start in 2008.

The CMHC contribute the results down to “Sustained job growth and positive migration are supporting more single detached home starts in 2008.” They say that the hot resale market is another key for strong new residential growth.

Canada’s skilled migration program and other visa projects are constantly being assessed in order to improve their efficiency. With this in mind, it is unlikely that the housing market and demand in particularly is likely to slow. After all Canada has seen population growth throughout its provinces and cities for the past four years.

Canadian Housing Market Still Strong

Conditions in the Canadian housing market remain favourable with overall prices rising and few signs of excess supply, according to the Central Bank. Last month statistics showed the annual rise in new housing prices slowed to 5.2 per cent, its weakest pace since September 2005.

The recent deceleration in house prices has been most noticeable in certain markets, such as the energy-rich province of Alberta, which had seen steep price increases in the past two years.

Sheryl Kennedy, deputy governor of the Bank of Canada said,

“The moderation in activity and price increases that we have seen in recent months is both expected and welcomed.”

A declining trend in building permits also suggest that supply is adjusting to softening demand, while the mortgage market is in reasonably good shape. Canada has a conservative mortgage culture, but the deputy governor urged domestic lenders to apply consistent standards in both good times and bad.

Innovations in mortgages and home equity loans should not depend on an assumption of appreciating house prices, and they need to be transparent, so that market participants understand the risks they are taking.

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