Canadian real estate and uptick in provincial migration
Landlocked provinces seeing exodus as people head to Canada’s coasts
Housing prices across Ontario continue to rise. In Toronto, home prices are up about a third and show no signs of slowing down. In Ottawa, detached homes are up more than 16.6% year-over-year in the third quarter, selling for a median price of $665,000. Canadian real estate provincial migration seems to be on the rise. And more and more Canadians are leaving Ontario and heading to the coasts; could change be on the way?
For years Ontario and has been Canada’s business hub, housing major manufacturing and tech industry players and causing people to flock to the larger cities for opportunities.
New data from Statistics Canada shows that more Canadians are moving within the country, while fewer staying in their hometown or in the city of their workplace. The pandemic-induced shift to remote work has caused an uptick in people who have shirked urban centres, where the cost of living continues to increase.
Instead, it appears people are heading to the coasts. From April to June 2021, British Columbia saw more than 15,000 Canadians migrate there, while the Atlantic provinces also saw growth. Nova Scotia saw nearly 5,000 new residents, followed by New Brunswick with 2,000, Prince Edward Island with 869 and Newfoundland and Labrador with 626.
Meanwhile, Ontario saw close to 12,000 residents leave—the largest exodus since the early 1980s. Alberta saw about 5,500 residents leave in the same time period, while Manitoba and Saskatchewan saw drops of 3,613 and 3,362, respectively.
Canadian real estate provincial migration Impact in Ontario
While people are finding new places to live within Canada’s borders, the population growth is relatively flat. According to RE/MAX, Canada’s growth pace was just a half percent from 2021 to 2021, down more than 50 per cent from the year before. That’s the slowest growth rate in over a century. Some researchers believe that the stagnation comes from COVID-19-related deaths and border restrictions that have reduced migration.
Perhaps the solution lies therein. The Canadian government has pledged to welcome more than a million immigrants over the next three years, many of whom will likely end up in Ontario or British Columbia. It will be up to smaller cities and regions to attract immigrants to choose them over bigger cities. Toronto, for example, is a highly attractive destination for immigrants: in 2018, 77 per cent of new arrivals in Ontario—some 106,000 immigrants—settled in the Greater Toronto Area.
Take Ottawa-Gatineau: in 2020, a report from The Conference Board of Canada recommended that the region come up with a strategy to make itself more attractive to immigrants. It noted that, with demographic challenges on the horizon, immigration would be necessary to sustain economic growth.
Yet increased migration or not, Ottawa is projected to continue growing. The city’s population is expected to rise by 40% to 1.4 million in the next 25 years.
As of 2020, CBC reported that Ottawa was still planning on expanding its suburbs, with about 80,000 more suburban houses in the works. By 2046, there could be another 42,700 apartments and another 49,400 single-detached, semi-detached and row homes in Ottawa’s neighbourhoods of today.
Mayor Jim Watson pointed to what he called a “balanced approach,” splitting the 400,000 more homes needed between built-up and undeveloped areas.
Interprovincial migration’s effect on the housing market
As noted, rising housing prices have been an issue in Canada’s urban centres for some time, but affordability has been an issue in smaller towns and rural communities, as well. The remote work flexibility has pushed some of those limitations to previously affordable places too: urbanites, who have sold their homes in high-demand areas, are now leaving the province and driving up housing prices in other markets.
Despite some provinces—like Ontario and the prairies—losing thousands of residents, housing prices continue to rise. Data analyzed by RE/MAX shows that 27 out of 30 major housing markets are considered sellers’ markets as demand continues to outweigh supply. Average residential sale prices are also expected to increase by another 5 per cent by the end of the year.
The Canadian real estate market has been incredibly strong since the pandemic began and it shows no signs of slowing down. High demand, low supply, work flexibility and low interest rates have all contributed to pent-up demand that’s sent prices flying. There are plenty of reasons that could continue for the foreseeable future.