The sharp decline in the number of new permanent residents has significantly affected the Canadian real estate sector, according to a new study by real estate information portal Better Dwelling.
Data from Immigration, Refugees and Citizenship Canada (IRCC) indicated that Canada had 4,140 newly admitted permanent residents in April.
According to Better Dwelling’s analysis of the IRCC figures, this was 78% below March levels and 85% lower year-over-year, and contributed to the roughly 20% annual decline in the January-April total (73,920 new permanent residents).
The phenomenon was especially apparent in the largest cities. The number of new permanent residents in Toronto, Vancouver, and Montreal fell by 84%, 91%, and 94% annually, respectively.
Year-to-date declines in these markets were also significant, with Vancouver (down 6.6% from last year) faring markedly better than Toronto (down 22%) and Montreal (down 31%).
Despite this slowdown in the entry of new buyers, the COVID-19 outbreak has not stopped Canadians from borrowing, Bank of Canada numbers showed.
As of the end of April, Canada’s total outstanding mortgage credit was at $1.65 trillion, up 0.6% monthly and 5.8% annually.
Better Dwelling said that these readings were among the strongest in several years.
“The monthly increase of 0.60% is the biggest for April since 2009. The 5.8% is the highest year-over-year growth since August 2017,” Better Dwelling said in a separate analysis. “Part of this is due to mortgage deferrals – over one in ten mortgages are no longer making payments. If [there are] no payments to reduce the balance, the total swells more easily.”