Immigration-driven population growth could drive rent in major cities well beyond the reach of most Canadians within the next two decades.
The latest research spearheaded by the John Molson School of Business at Concordia University, in partnership with Equiton, predicts that rents could reach a whopping $5,600 per month in major cities if trends continue.
Associate professor of real estate and finance Erkan Yönder created the model that resulted in the report, titled AI-Driven Insights into Key Factors Influencing Canada’s Rental Market.
The study reveals that even a modest increase in the immigrant population has a measurable impact on rent prices, with a 1% rise in immigrants correlating to a 0.6% hike in local rents. This effect is magnified when considering non-permanent residents, where a 1% increase translates to a 2% rent spike, underscoring the significant influence of demographic changes on the housing market.
“Canadian immigration and housing policies have been out of sync for decades,” said Yönder.
As urban centres like Vancouver, Montreal, Calgary, and Toronto face steep rent hikes, the research anticipates a 72% surge in the cost of a two-bedroom apartment in Toronto over the next decade, pushing rents to an eye-watering $5,600 per month.
Canada may officially welcome 500,000 permanent residents each year, but as True North reported, the total number of immigrants entering annually rises to 2.2 million when factoring in temporary foreign workers, international students, and illegal immigrants.
The latest government data shows that Canada has already filled 28,730 low-wage temporary foreign worker positions in the first quarter of 2024, accounting for 34% of the total from last year and is potentially on course to surpass 2023’s numbers
This projection challenges the long-held assumption that a surge in housing supply will naturally result in lower rents. Instead, the report argues that without a dramatic increase in housing completion rates—specifically, to 6% of total dwellings annually—the trend of rising rents is likely to persist.
In the Greater Toronto Area, the research indicated that annual housing completions must soar to 11%—nearly tenfold the 2023 level—before any decrease in rents can be expected.
Nationwide, the study observes a concerning decline in vacancy rates, with figures nearing a critical 1% across the country.
