Demographics are making headlines in Canada. The national population hit 40 million in the summer of 2023 and within nine months surged to 41 million, primarily due to immigration. Despite plans to temporarily reduce immigration, especially foreign students, Canada’s population is expected to continue its substantial growth in the coming months and years.

Exploring the Impact on Canadian Real Estate

In the latest episode of CRE Talks, Stan Ivankovic, Vice-President of Business Development at Environics Analytics, and Adam Jacobs, Head of Research at Colliers Canada, dive into how record immigration and rebounding tourism are shaping Canada’s labor market, consumer spending, and housing sector.

High Home Prices and Development Delays

Canadian residents continue to grapple with soaring home prices, development delays, and sluggish construction of new homes. While challenges persist, there are bright spots on the horizon:

– Immigration Trends: Over the past few years, more immigrants have been settling in secondary or tertiary markets, especially in Alberta, which has been actively seeking to attract more residents.

– Changing Consumption Patterns: Immigration is not only increasing the number of Canadian consumers but also shifting how people consume products and the types of services required across the country.

– Office Market Growth: A growing population could benefit the office market, as many industries will need larger teams of white-collar workers to remain functional and productive.

– Housing Demand: The overall demand for various types of housing is on the rise. However, meaningful solutions to expand and diversify the national housing inventory to keep pace with growth are still lacking. It is increasingly clear that governments alone cannot solve this problem.

Debates on Productivity and Office Space

The ongoing debate about productivity and office space continues. While many workers remain productive in hybrid work environments, questions about the long-term consequences for innovation persist.

Retail and Tourism Sectors

– Thriving Retail Sectors: Footwear, cosmetics, dollar stores, and urban malls are performing well in the retail landscape. However, other retail types face varied performances.

– Tourism Recovery: Some forms of tourism, including cruises, are bouncing back. However, tourism from China has yet to return to pre-pandemic levels, which could impact the luxury shopping sector.

The dynamic interplay between population growth, immigration, and demographics is reshaping Canadian real estate. As we navigate these changes, understanding their implications is crucial for adapting to the evolving market landscape.