1 in 5 homes in Canada bought by newcomers, Royal LePage survey says
People new to Canada contribute 'significantly' to real estate demand, CEO says
One in every five homes in Canada is bought by newcomers to the country, according to a Royal LePage survey released on Wednesday.
The Royal LePage Newcomer 2019 Survey, which was commissioned by the real estate company, found that newcomers spend about three years in Canada before buying a home and that 75 per cent of newcomers arrive with savings or cash to help buy a home.
About 1,500 people, all of whom arrived in Canada within the last 10 years, were interviewed by public opinion polling and market research company Leger for the survey and it was conducted online in August.
Phil Soper, president and CEO of Royal LePage, said in an interview with CBC's Radio-Canada that the survey found that newcomers represent about 21 per cent of all homebuyers in Canada. That number suggests people new to the country are contributing "significantly" to real estate demand, he said.
"We know that Canada is a country of immigrants and we know that newcomers to Canada are an important part of our economic growth. What surprises us in the data is just how important they are to Canada's real estate market," Soper said on Tuesday.
If current international migration levels are maintained, Royal LePage estimates that newcomers are expected to buy 680,000 homes in Canada over the next five years.
The projected home sales was calculated using historic migration levels from Statistics Canada, the survey's home ownership rate of newcomers and Canadian Real Estate Association and Canadian Mortgage and Housing Corporation unit sales data.
Royal LePage defined newcomers as people who have lived in Canada for 10 years or less. They include immigrants, students, refugees and citizens from other countries in Canada to work. According to the company, 31 per cent of newcomers are part of a family, 25 per cent are students, while 20 per cent are on their own. The vast majority of newcomers are immigrants, Soper said.
Soper said newcomers to Canada represent between two to three million people, while the total Canadian population is roughly 37 million. He noted about 300,000 people come to Canada as immigrants every year.
"What was surprising to us is just how many newcomers coming to Canada are focused on owning a home. Depending on the region of the country, almost all newcomers arrive with the necessary funds to purchase a home," Soper said.
The survey found that 86 per cent of newcomers see real estate as a good investment.
About 32 per cent of newcomers in Canada own homes, while 68 per cent of all Canadians are homeowners, according to the survey.
Of newcomers who buy a home, the survey says 51 per cent buy a detached house, 18 per cent buy a condo, 15 per cent buy a townhouse and 13 per cent buy a semi-detached house.
"It used to be that an immigrant got on a ship and arrived in the new land and they really didn't know what they were getting into. With the internet, of course, people understand the economies, the housing markets, the job markets of the regions that they are arriving in," he said.
"If they choose a relatively expensive part of the country, like Vancouver, they probably have the means to live in Vancouver."
Canada attracts people with skills, capital
Soper said the data clearly shows that Canada attracts people with means.
"Most of the people that we welcome as new Canadians have skills and capital, and we, because we are such a desirable place in the world to live, frankly get to pick and choose the best and brightest from around the world to live here," he said.
"We shouldn't be surprised that these people arrive with knowledge and resources because they are both courageous and capable," he said.
Across the country, 82 per cent of newcomers stay in the region of their first residence, the survey says.
Soper said the Greater Toronto Area, B.C.'s Lower Mainland and Greater Montreal are the three main areas where newcomers make their home and these regions will face the greatest challenges when it comes to providing shelter for people new to the country.
The survey found that 75 per cent of newcomers don't consider moving to the U.S. before arriving in Canada. According to the survey, newcomers say they feel more welcome here as immigrants than they would in the U.S.
And upon arrival, the survey says 64 per cent of newcomers rent their first home while 15 per cent buy a home.
The survey was conducted between August 21 and 27, 2019, using Leger's online panel of 1,500 newcomers who arrived in Canada within the past 10 years.
The margin of error for this study was +/-2.5 per cent, 19 times out of 20.
With files from Philippe de Montigny