Canada has so much to offer, from its breathtakingly picturesque west-coast mountains, and the big-city lights of Toronto, to the quaint charm of Atlantic Canada. How could anyone stay in one place?
As it turns out, many Canadians aren’t sticking around in their hometowns or where their workplace is located, suggests new data from Statistics Canada – thanks in part to remote work allowances that have freed professionals from their daily commute and the need to live close to urban centres.
This became a dominant trend during the coronavirus pandemic. Be it the frenzy of sales activity, to consistent and pronounced price growth, the Canadian real estate market experienced a remarkable overhaul in the last 20 months. Thousands said “goodbye” to Ontario, and said “hello” to other regions. The Maritimes enjoyed the biggest population boom in decades.
So, what does this mean for Canada’s red-hot housing market?
Canadian Real Estate: Uptick in Inter-Provincial Migration
According to Statistics Canada, inter-provincial migration advanced 55.1% in the second quarter of 2021, totalling just over 123,000 people. This was the highest change since the third quarter of 1991. The April-to-June reading was still below the record high of about 150,000 in the late 1970s.
What places did people leave, and where did they venture to within Canada? Let’s put it this way: Canadians were moving away from land-locked provinces in favour of homes with a coastal view.
Statistics Canda says Ontario experienced the biggest population decline, with close to 12,000 residents ditching this most-populous province. This was the largest population outflow since the early 1980s.
Alberta was next on the list, with close to 5,500 residents leaving the western province from April to June, 2021. This was followed by Manitoba (-3,613) and Saskatchewan (-3,362).
British Columbia attracted the greatest number of Canadians in the second quarter, growing by more than 15,000 people.
In second place was Nova Scotia, increasing by nearly 5,000 residents during this same quarter. New Brunswick was third, adding more than 2,000 new people to its population.
The remaining provinces that enjoyed modest population gains were Prince Edward Island (+869), Newfoundland and Labrador (+806), and Quebec (+626).
Despite this, the Canadian population is struggling to grow and return to pre-pandemic levels. The federal statistics agency reported that the pace of growth was just 0.5% in 2020-2021, down from the 1.2% growth in the 2019-2020 period. This is the slowest growth rate in more than a century.
Researchers attribute this lacklustre population increase to the number of coronavirus-related deaths and border restrictions that reduced international migration flows.
What’s Happening in the Canadian Real Estate Market?
The Canadian real estate market has experienced many different developments since the beginning of COVID-19. Pent-up demand, interest rates, and low inventory levels have been the dominant themes during this period. But there have been numerous trends forming in the national housing market – inter-provincial migration is one of them.
Housing affordability has been a concern in major urban centres, even before the pandemic. However, it appears that much of the country is experiencing an affordability crisis, including small towns, rural communities and cottage countries. This has left many young Canadians and first-time homebuyers sitting on the sidelines, unable to acquire a residential property, even in remote markets far from urban hubs.
The global health crisis also served as an opportunity for urban dwellers, flush with enormous equity, to leave behind these metropolises for suburban life. But this shift has created fresh hurdles for people living in those areas, as out-of-province and out-of-town buyers are elevating the price of these once-affordable homes by outbidding others by remarkable levels.
But while B.C.’s growth may not be too surprising to some, considering its many dynamic and economically prosperous cities, the growth in Atlantic Canada has been noteworthy. The eastern seaboard has not witnessed this type of population growth since 1961, and the regional economy – including the housing sector – is beginning to respond to these trends.
“The construction and finance, insurance and real estate (FIRE) industries are making solid contributions to over-all economic activity,” TD Bank noted in its quarterly provincial forecast, released in September. “The former is being buoyed by strong housing construction and the government’s commitment to spend $1.2 billion on capital projects, while the province’s heated housing market has helped FIRE employment increase by 5% year-to-date.”
This might not be a short-term trend, either. The data show that young people are driving this migration out east. Canadians between 18 and 24 and between 45 and 44 accounted for 44% of interprovincial migration to Atlantic Canada. Another 17% included children and teenagers. Put simply, the future is bright in the Maritimes.
Will Immigrants Make a Difference?
The Canadian government has pledged to allow approximately 1.2 million newcomers into the country over the next three years. With this inflow, there will be fresh demand for already-low housing inventories. Where will these immigrants be concentrated? Likely destinations will be Ontario and British Columbia, but with the incredible economic revitalization transpiring in Atlantic Canada, cities such as Halifax and Fredericton could be new potential hot-spots for planting roots and accessing economic opportunities.