Overview: a look at the new permanent residency pathways Canada is offering Hong Kong residents and its impact on Toronto home prices.
That number is set to skyrocket thanks to two new permanent residency pathways.
According to CBC News:
Canada is offering two new paths to permanent residency for Hong Kong residents who work here or are recent graduates already living in the country.
This is in addition to another pathway for over 90,000 temporary workers and international graduates announced back in April.
So what impact will these have on Toronto’s housing market, including sales and prices?
Let’s find out.
Understanding The New Permanent Residency Pathways
The first applies to Hong Kong residents who already live in Canada.
Global News reports:
One pathway will allow Hong Kong residents who have graduated from a Canadian post-secondary institution in the past three years to apply for permanent residence.
This approach requires completing at least 50% of studies while in Canada.
The second pathway is employment-based.
As per CBC News:
The second is for applicants who have at least one year of full-time work experience or 1,560 hours of part-time work in Canada in the last three years.
Applicants must also hold a degree, diploma or graduate certificate from a post-secondary institution in the last five years.
The government is implementing several other programs to attract and keep Hong Kong residents in Canada.
- Expediting permanent residency applications and family sponsorship
- Accelerating applications for students who want to study in Canada
- Attracting Hong Kong youth with a new open work permit program
- Increasing the promotion of “super visas” (i.e. visas for parents and grandparents)
Impact On Toronto Home Sales and Prices
After all, 90,000 people spread over 10 provinces and 3 territories doesn’t sound like much.
Except it’s not 90,000—Canada is set to welcome a record 401,000 permanent residents this year alone!
CIC News informs that 44.9% of all immigrants settle in Ontario, with 35% choosing Toronto as their home.
That means Toronto will receive about 140,000 immigrants (35% of 401,000) by the end of December.
The result? A massive surge in housing prices and demand.
According to Forbes:
Immigration is a key contributor to the strength of Toronto’s real estate market…and ensures a healthy tension between housing supply and demand.
When immigrants and students from Hong Kong arrive in Toronto, they’ll head for the condo market.
As Toronto Storeys reveals:
…the Toronto condominium segment is expected to experience the most activity in 2021, based on their affordability—particularly for first-time homebuyers.
The result will be “relentlessly high demand and inevitable bidding wars,” both of which mean higher prices.
So the new permanent residency pathways, along with Canada’s historic immigration numbers, will send Toronto’s housing market into overdrive, creating incredible demand and pushing up prices.
Where does this leave buyers and sellers?
Advice For Sellers
Home sellers are uniquely positioned to benefit from the Hong Kong permanent residency pathways and historic immigration numbers.
While most immigrants rent, they also buy homes at roughly the same rate as people born here.
Statistics Canada reports:
About one-half of all selected properties owned by immigrants in Toronto are single-detached houses, compared to 60% of properties with Canadian-born owners. Condominiums account for 22% of immigrant-owned properties in Toronto, compared to 19% of those owned by Canadian-born residents.
In fact, with the exception of detached houses, Toronto immigrants own more of all other property types than natural-born citizens.
All of the above is great news for sellers and investors.
As immigration picks up in the coming months, it will lead to increased demand in both the rental and ownership markets, allowing homeowners to use that leverage to get the best deal possible.
Advice For Buyers
Because immigration is on hold due to COVID, buyers have the luxury of less competition.
However, once travel restrictions finally lift and Toronto welcomes 140,000 new immigrants, all that will change.
Buyers will face more people, encounter higher bids, and ultimately pay bigger prices.
Things will be especially challenging for first-time buyers who, like immigrants, tend to purchase condos because of their affordability.
And with vaccinations on the rise and talk of travel restrictions being eased, it’s only a matter of time till borders reopen.
When that happens, the window of opportunity will close for buyers.
Another advantage buyers currently enjoy is ultra-low interest rates.
But these are also expected to rise in the coming months as Canada’s economy recovers, and as a way to cool down the housing market.
In other words: it’s better to buy before borders reopen, immigration resumes and interest rates increase.
Permanent Residency Pathways: Conclusion
As the Forbes quote makes clear, Toronto needs immigration to ensure a healthy balance of housing supply and demand.
The upcoming permanent residency pathways for Hong Kong residents, together with a historic rise in immigration, will do just that.
The result will be a frenzy of sales activity and higher prices, both of which favour sellers.
However, buyers still have a chance to take advantage of the current COVID restrictions and low-interest rates to find their dream home.
Want to know more about the permanent residency pathways? Contact me below for details.
Real Estate Broker
Living Realty Inc., Brokerage
m: 416.903.7032 p: 416.975.9889
a: 7 Hayden Street Toronto, M4Y 2P2
w: www.winslai.com e: [email protected]
*Top Producer (Yonge and Bloor Branch) – 2017, 2018, 2019, 2020