Canada’s population growth is contributing to rising home costs. The more the demand, the higher the property price, right? Don’t jump to conclusions; the story’s premise could not be accurate. The income levels of immigrants were surveyed in 2021, and the results were just revealed by Statistics Canada (Stat Can). Recent immigrants to Canada have lower wages than the average Canadian, making it difficult for them to afford even the most basic housing needs without raising rents.
Recent Canadian immigrants had far lower wages than native Canadians
Recent immigrants to Canada (those who came between 2016 and 2019) are paid much less than native-born Canadians. The median annual income of these immigrants was $35.6k, which was about 20% (-$7.2k) lower than their non-immigrant counterparts. It’s not simple to obtain affordable housing if a couple earns the median salary.
Rent in Most Canadian Cities Is Too Expensive for Newcomers
Finding affordable rental homes is challenging for them. At the 30% poverty line for housing costs, they have a maximum monthly budget of $1,780. Put another way, that’s around 17% less than the $2,140/month a dual-income, non-immigrant family may spend before meeting the shelter poverty criterion. In April, the national average for a one-bedroom rental was a little over $2,000 per month. The average monthly rent is much higher in more costly cities like Toronto ($2,370) and Vancouver ($2,600).
Canadians could only afford to buy a home in a few urban centres
It will also be difficult to purchase a property at this salary. The maximum price they could pay is roughly $400,000 if they used 100% of their available credit and a high-ratio mortgage. It’s around $65k less than a family of four without immigration status could afford.
In all of Canada, that amount of money won’t go very far. According to CREA, the national average house price in March was $709,000 nationwide. Winnipeg ($331k), Moncton ($309), Quebec City ($323k), St. John’s ($313k), Regina ($309k), Mauricie, QC ($231k), Fredericton ($273k), or Saint John ($270k) are among the few places that come close to the budget.
For a while, a story can keep a trend going, but it becomes difficult to maintain after that. Immigration and population expansion may boost demand, but wages couldn’t keep up in the long run. Taking increasing proportions of family earnings is the only way to continuously boost rents without fast, inflationary rise of income. On the other hand, widespread acceptance of shelter poverty isn’t exactly a selling factor for future immigration.