Last year, the Feds lowered immigration targets in response to Canadians getting grouchy about the number people entering the country. This is expected to be felt starting this year. RBC estimates that Canada's overall population will shrink by about 0.2% this year and next, before returning to positive growth in 2027 (albeit at a lower rate).
That said, the data we have at our disposal today is backward looking and for the 12 months ending on July 1, 2024, Canada continued to see impressive population growth. Looking at the Greater Golden Horseshoe specifically, it grew by about 382,000 people. The 2023 figure was also revised upward from 340,000 to 367,000.
Here's a table from TMU's Centre for Urban Research and Land Development:
Nearly three-quarters of this growth was concentrated in the Greater Toronto Area, and about three-quarters of this growth was concentrated in Toronto and Peel at 143,000 and 70,000 people, respectively. These are big numbers, especially during a period of dramatically fewer housing starts.
Of course, going forward, lower household formation should alleviate some of the pressures on our housing market. But zero population growth is not sustainable, not unless we want to end up like Japan with a demographic crisis. So there will be tremendous market pressures to return to positive growth.
At the same time, if we go back to RBC's insight report, it specifically says: "This [lower immigration levels] will help realign housing demand with supply — so long as homebuilding can be sustained near current levels." Yeah, that's not happening. Housing starts in the Toronto region have fallen off a cliff.
So I continue to feel like 2027 will mark an important turning point for our housing market. It could be the year when population growth broadly returns, when we've fully absorbed the supply from the last cycle, and when we suddenly realize we don't have nearly enough new housing. Or at least that's my view.
Cover photo by Richard Hong on Unsplash
Approximately 41% of the YTD population growth in Canada this year has been in Ontario. Here's a slide from a recent presentation by Zonda Urban:
So there's an argument to be made that demand is still outpacing new housing supply in most of our major markets:
Why then are new home sales continuing to slide? A reasonable answer would be that -- by design -- this new housing isn't attainable to most:
The result seems to be a long-term structural shift toward more rental housing:
Last month, I wrote a post called, More people, fewer new homes. And in it, was a chart showing that for the 12 months ending July 1, 2023, Toronto grew by approximately 126,000 people, and the Greater Toronto Area grew by about 233,000 people. Big numbers. At the end of the post, I also mentioned that this is more growth than the city has seen over the six preceding years.
But how does this compare to other cities in Canada and the US? If we look at only central cities (not metro areas), Toronto is, in fact, first. Canadian central cities, in general, also seem to be growing more quickly than their US counterparts. After Toronto is Calgary, which added nearly 87,000 people for the same time period.
Looking at metro areas, Toronto is still first. I don't know why the ~222k figure, here, doesn't reconcile with the ~233k figure from last month's post, but presumably it's some sort of boundary difference. In any event, Toronto is first. But now, once you include metro areas, US cities do much better in this list. Number two is Dallas-Fort Worth-Arlington.
This difference between central cities and metro areas likely tells us something about the way in which these city regions are growing. Still, it would be interesting to see how much of this population growth is being accommodated through infill development vs. greenfield development. One way to measure that might be to look at changes in the footprint of their built up areas.
For more about the above two charts, check out this recent post from TMU's Center for Urban Research and Land Development.
Last year, the Feds lowered immigration targets in response to Canadians getting grouchy about the number people entering the country. This is expected to be felt starting this year. RBC estimates that Canada's overall population will shrink by about 0.2% this year and next, before returning to positive growth in 2027 (albeit at a lower rate).
That said, the data we have at our disposal today is backward looking and for the 12 months ending on July 1, 2024, Canada continued to see impressive population growth. Looking at the Greater Golden Horseshoe specifically, it grew by about 382,000 people. The 2023 figure was also revised upward from 340,000 to 367,000.
Here's a table from TMU's Centre for Urban Research and Land Development:
Nearly three-quarters of this growth was concentrated in the Greater Toronto Area, and about three-quarters of this growth was concentrated in Toronto and Peel at 143,000 and 70,000 people, respectively. These are big numbers, especially during a period of dramatically fewer housing starts.
Of course, going forward, lower household formation should alleviate some of the pressures on our housing market. But zero population growth is not sustainable, not unless we want to end up like Japan with a demographic crisis. So there will be tremendous market pressures to return to positive growth.
At the same time, if we go back to RBC's insight report, it specifically says: "This [lower immigration levels] will help realign housing demand with supply — so long as homebuilding can be sustained near current levels." Yeah, that's not happening. Housing starts in the Toronto region have fallen off a cliff.
So I continue to feel like 2027 will mark an important turning point for our housing market. It could be the year when population growth broadly returns, when we've fully absorbed the supply from the last cycle, and when we suddenly realize we don't have nearly enough new housing. Or at least that's my view.
Cover photo by Richard Hong on Unsplash
Approximately 41% of the YTD population growth in Canada this year has been in Ontario. Here's a slide from a recent presentation by Zonda Urban:
So there's an argument to be made that demand is still outpacing new housing supply in most of our major markets:
Why then are new home sales continuing to slide? A reasonable answer would be that -- by design -- this new housing isn't attainable to most:
The result seems to be a long-term structural shift toward more rental housing:
Last month, I wrote a post called, More people, fewer new homes. And in it, was a chart showing that for the 12 months ending July 1, 2023, Toronto grew by approximately 126,000 people, and the Greater Toronto Area grew by about 233,000 people. Big numbers. At the end of the post, I also mentioned that this is more growth than the city has seen over the six preceding years.
But how does this compare to other cities in Canada and the US? If we look at only central cities (not metro areas), Toronto is, in fact, first. Canadian central cities, in general, also seem to be growing more quickly than their US counterparts. After Toronto is Calgary, which added nearly 87,000 people for the same time period.
Looking at metro areas, Toronto is still first. I don't know why the ~222k figure, here, doesn't reconcile with the ~233k figure from last month's post, but presumably it's some sort of boundary difference. In any event, Toronto is first. But now, once you include metro areas, US cities do much better in this list. Number two is Dallas-Fort Worth-Arlington.
This difference between central cities and metro areas likely tells us something about the way in which these city regions are growing. Still, it would be interesting to see how much of this population growth is being accommodated through infill development vs. greenfield development. One way to measure that might be to look at changes in the footprint of their built up areas.
For more about the above two charts, check out this recent post from TMU's Center for Urban Research and Land Development.
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