Housing demand: Record 55,000 immigrants expected for Metro Vancouver in 2022

Feb 8 2022, 1:18 am

Heightened immigration volumes reaching a new record combined with strong economic recovery and the return of the international student population will likely add to Metro Vancouver’s housing pressures this year.

The federal government is welcoming 1.2 million immigrants into Canada over three years as a key strategy to propel short-term economic recovery and long-term economic growth, while also addressing the severe labour shortage and the forthcoming challenges with an aging boomer population.

Canada exceeded its immigration target of 401,000 in 2021 by welcoming 405,000 permanent residents, but this also comes after admitting just 185,000 permanent residents in 2020 due to the pandemic’s impact on migration patterns. The 2020 figure was the lowest number of new immigrants since 1998.

In a new market update, the economists with real estate marketing firm Rennie state it is likely Canada will reach and exceed its 2022 immigration target of 411,000 permanent residents.

Most of these immigrants are young with a typical age of 28 and are educated and skilled, with 70% deemed to be in the economic class.

BC typically attracts 17% of Canada’s new immigrants and of this provincial figure, 78% go to Metro Vancouver.

Rennie anticipates a new record of over 70,000 permanent residents will go to BC in 2022, with a new record of 55,000 calling Metro Vancouver their new home — equivalent to the population of the city of Port Coquitlam.

While immigration will accelerate, there will be a slight reversal of the strong pandemic-time domestic migration flows into Metro Vancouver from other parts of Canada.

Based on the last reference period for data, from the second quarter of 2020 to the third quarter of 2021, BC attracted over 48,000 net interprovincial migrants.

But in 2022, Metro Vancouver is expected to lose about 1,500 residents through domestic migration, as the region’s 11,000 net interprovincial migrants will be outnumbered by the net loss of 12,500 people to other areas of BC.

“Lifestyle factors combined with the ability to work remotely, a relatively well-performing labour market with strong prospects, and less-restrictive pandemic-related policies than in some other parts of the country have contributed to this, and will continue to do so in the coming year,” reads the report.

“While these interprovincial migration flows will continue to add to Metro Vancouver’s population, affordability concerns will see intraprovincial flows for the region remain negative.”

All things considered, Rennie economists forecast about 68,000 people will be added to Metro Vancouver in 2022, which would be 70% higher than the past 10-year annual average and mainly driven by immigration. This overall population growth will be equivalent to gaining the entirety of New Westminster.

All the while, in 2022, Metro Vancouver is forecast to see a net gain of 40,000 to 50,000 new jobs or an uptick of 3%. This follows the 78,000 jobs that were added in 2021 and the 218,000 jobs that were regained by the end of 2020 following the 270,000 job losses between April and June 2020.

This year’s job growth will significantly exceed the average annual job additions of 32,000 in the decade prior to the pandemic. The unemployment rate in Metro Vancouver was 2% lower than before the pandemic, and the rate is expected to further narrow to 4% to 5% by the end of 2022.

“The most obvious consequence of adding many more people to our region — necessary for economic reasons — is that it puts pressure on our housing market to ensure everyone has a suitable, adequate, and affordable place to live as an owner or renter,” reads the report.

“That will be one of our greatest collective challenges as a region as we look at the year (and years) ahead.”

Last week, BC Real Estate Association stated the province’s strong fundamentals and housing supply shortage will continue to fuel the price creep over the next two years.

Areas within the jurisdiction of the Real Estate Board of Greater Vancouver will see home prices rise by 8.1% to $1.285 million in 2022, and 2.7% to $1.32 million in 2023.

Within the Fraser Valley Real Estate Board, which includes Metro Vancouver areas such as Surrey, Langley, North Delta, and White Rock, home rices are forecast to go up by 7.5% to $1.09 million in 2022 and 5.5% to $1.15 million in 2023.

Kenneth ChanKenneth Chan

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