As eye-opening immigration targets and new records dominate Canadian headlines, Konfidis digs deeper to understand where in Canada immigrants are landing, and perhaps more importantly, where they are sticking around.
As background, Konfidis shared an article last month outlining the staggering immigration picture in Canada (Konfidis Insights - Can our Country Keep Up?). Since 2016, the country’s population has grown at nearly double the rate of its Group of Seven peers. For the most part, that growth is driven by immigration. And looking forward, Canada is targeting 1.5 million new immigrants by 2025.
In a previous Konfidis Insights (Ontario’s Secondary Markets Population Boom Boon), we shared data indicating that the majority of these Canadian newcomers are landing in Ontario. Moreover, we highlighted the clear trend in the share of Ontario immigration’s intended designations away from Toronto and into the GTA’s surrounding secondary markets such as London or Kitchener-Cambridge-Waterloo.
And while immigration to Ontario is certainly a positive indicator for economic growth and housing demand, has Ontario been successful in retaining its immigrants? According to Statistics Canada data, yes.
To assess this matter, Statistics Canada examines which province or territory immigrants land in, and whether they are still filing taxes in that province many years later.
Per the chart below, over 90% of the immigrants that settled in Ontario in 2010 and 2015 remained local taxpayers 5-years later. Ontario leads all Canadian provinces and territories in this regard while Prince Edward Island had the lowest retention rates 5-year of 16% for the 2010 settlement year and 28% for 2015.
Taking a longer-term view, Konfidis assessed the 10-year retention rate, by province, for immigrants admitted in 2010 and still present in their original province in 2020. Similar to the 5-year rates, Ontario leads the pack with Alberta closely behind.
We further parse the 10-year retention data by the various types of immigration categories such as economic immigrants, immigrants sponsored by family, refugees, and work & study permit holders. There is a similar trend across all categories with Ontario proven most successful in immigrant retention across the country.
In consideration of this data, and if history is any indication of the future, Ontario appears most ripe to benefit from Canada’s record immigration targets as a long-term beneficiary. As new immigrants land and put down long-term roots across Ontario, the demand for housing and rental alternatives bolsters the outlook for single-family rental investors.
And despite this backdrop, Canada continued to fall short on new home deliveries (see the recent Konfidis Insights - Despite Demand, Investment in Residential Building Construction Declines).
As such, Konfidis continues to see a compelling landscape for single-family rental ownership and the long-term supply and demand fundamentals that support strong home price appreciation and inflation protection