Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
The Globe is going with a pretty click-bait-y title. But, I’ve seen others call for coordinating federal immigration numbers with infrastructure planning by municipalities and provinces. It looks like National Bank is on the same wavelength.
“The federal government’s decision to open the immigration floodgates during the most aggressive monetary tightening cycle in a generation has created a record imbalance between housing supply and demand. According to Statistics Canada, the working-age population surged 238,000 in Q2. That was the largest quarterly increase on record and 6.8 standard deviations from the historical norm of 82,000 per quarter. Unfortunately, Canadian homebuilders can’t keep up with this influx. Housing starts for Q2 2023 stood at 62,000 units (or 247,000 annualized). At just 0.26, the ratio of housing starts to working-age population growth fell to a new and stands at less than half its historical average of 0.61 (the ratio is normally below 1 to account for the fact that there is more than one person per household). To meet demand, builders would need to break ground on 144,000 units per quarter (or 576K annualized), double the best performance ever!
At an absolute bare minimum, post-secondary institutions should show students have decent housing before visas are granted.
Is it possible they both want monetary tightening to curb inflation, but also want they housing bubble to continue so the interest rates don’t impact it as much? This is consistent with the federal response to the housing crisis so far. Either way, that’s the impact this is having by cranking up housing demand.
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Is it possible they both want monetary tightening to curb inflation, but also want they housing bubble to continue so the interest rates don’t impact it as much? This is consistent with the federal response to the housing crisis so far. Either way, that’s the impact this is having by cranking up housing demand.
I’m not sure if extending the housing bubble is planned, or if it’s a side effect of other policies. But it’s frustrating.