Flood of new arrivals could keep Canadian housing prices from crashing | Forexlive

Canada is one of the most-overvalued housing markets in the world relative to income and there’s currently a harsh correction ongoing. That should weigh heavily on the Bank of Canada decision today, in large part because it was Macklem that helped to fuel the bubble when he promised to keep rates low for a long time.

However even with another rate hike, a crash isn’t necessarily coming.

CIBC is out with a report today looking at housing and immigration trends. Canadian PM Trudeau pledged to dramatically increase immigration to Canada and the effects are already evident, with rental housing shortages everywhere.

CIBC today estimates the number of non-permanent residents arriving in Canada and pegs it at 258K in 2021, “no less than 700K” in 2022 and as many as 1 million this year.

“It’s not a stretch to suggest that the number of
new international arrivals in 2023 might reach one million. This
kind of inflow suggests that existing policy tools will easily fall
short of addressing the current and future increase in housing
demand. At the minimum, short-term housing solutions are
needed to accommodate the upcoming unprecedented surge in
the number of new arrivals,” CIBC writes.