As home prices continue to climb higher, newcomers are scooping up Canadian real estate.
According to a survey by Royal LePage, one in five homes is bought by people who came to the country within the last 10 years.
If migration rates don’t change, 680,000 homes could be bought by newcomers over the next five years.
Phil Soper, Royal LePage CEO, says targeting immigrants isn’t the solution to the affordability problem.
“In addition to supporting Canada’s economic growth, newcomers to Canada are vital to the health of our national real estate market,” said Soper in a release.
“The combined demand for affordable housing among younger Canadians and new Canadians can be met through housing policies that encourage smart and sustainable development, with a focus on protecting and developing green spaces in our urban centres. Canada’s economy and labour markets are expanding and it is crucial that housing supply keeps pace.”
The survey also found 85 per cent of newcomers think real estate is a good investment. Yet, only 32 per cent of them are homeowners, compared to 68 per cent for all Canadians.
For those who do get into the housing market, most (75 per cent) arrived with cash-in-hand for a down payment and bought within three years.
At 45 per cent, homeownership among newcomers is highest in Alberta.
“Alberta is particularly appealing to newcomers from all over the world, and already established Canadians who wish to migrate to the province,” said Corinne Lyall, Royal LePage Benchmark broker and owner, in a release.
“Calgary has a truly welcoming attitude. It is a relatively young city so the majority of the population was not born here. There is a lot of support for newcomers, along with a real sense of community and love for the area.”
The newcomers polled said the main reason they chose Canada was feeling welcomed as immigrants—75 per cent had no plans to move to the U.S. eventually.
The effect could be larger on Canada’s rental market, considering 64 per cent rent their first home and 15 per cent buy. The rest live with family or friends.
The cost of renting a home has become increasingly unaffordable, especially in cities like Toronto where rent is up twice as fast as incomes.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.