Immigration and Housing Prices (Canada Case Study)
I covered a recent paper on housing prices in Denmark that claimed housing prices rise by 11% on average when the immigrant population increases by 1%. I saw the same 11% number today in a paper published this summer by two governmental bodies of Canada, linking immigrant influx to a rise in housing prices and rent.
Even though the authors of both studies have explicitly cautioned against the major takeaway being "immigrants are why you can't afford a home," anti-immigration politicians have already taken up that exact talking point across Europe and the Americas. It hits at both economic insecurity as well as homeownership, so unfortunately I predict studies like this to be politically-leveraged for quite some time.
Here are my key takeaways:
- Regional Economic Conditions Matter More than Raw Immigration Numbers
- 2006-2011: Strong positive correlation between immigration and prices
- 2011-2016: Negative correlation (immigrants went to Saskatchewan/Alberta where prices stayed flat, while Toronto/Vancouver saw massive price jumps with fewer immigrants)
- 2016-2021: Strong positive correlation again as immigrants concentrated in southern Ontario
- Size Matters: Effect Was Concentrated in Large Cities
- Small municipalities (under 10,000): Essentially no statistically significant effect
- Cities over 100,000: Much stronger correlation (where 82% of immigrants actually settle)
- Impact is 4-5x larger in major urban centers than national averages suggest