In a research note released last week, National Bank chief economist Stefane Marion stated that nationwide job growth stood at 0.9 per cent in 2015, with the greatest gains seen in Vancouver (4.4 per cent) and Toronto (5.5 per cent).
Marion said that the abundance of skilled young professionals in these cities, widely acknowledged as Canada’s most active housing markets, is not a coincidence.
“Strangely enough, the alarmists fail to mention that the working age population is growing 70 per cent faster than the national average in Vancouver and Toronto on the back of strong inflows of highly educated immigrants who can more easily integrate [into] the job market,” Marion wrote in the note, as quoted by BNN.
“The underlying force for housing demand is household formation. If your population aged 20 to 44 is growing, you have it. If it’s not, home price inflation is not sustainable,” he added.
The upward spiral of housing prices does not appear to be stopping any time soon. Figures from the Real Estate Board of Greater Vancouver revealed that baseline costs of residential properties in the city rose by 22 per cent in February compared to the same time last year. Meanwhile, Toronto real estate associations said that prices in their locality shot up by 15 per cent in the same period.
While a host of factors such as foreign capital and the phenomenon of “shadow flipping” have been blamed for the seemingly inexorable price growth in Canadian real estate, a banking official said that the working-age population is also driving much of the demand in the country’s urban centres.