Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)
Welcoming 1.2 million new people this year
Happy holidays, everyone. 🎅 With a new year comes new challenges and opportunities. But one thing that won’t change much in 2024 is the rate of immigration, lol.
The government recently decided to plateau its long-term immigration targets, gradually increasing the amount of new permanent residents from 465,000 in 2023 to 500,000 by 2025, where it will remain for 2026. But this only accounts for PR approvals. Non-permanent immigrants such as international students and temporary foreign workers make up a large part of our growing country as well.
Statistics Canada says that overall, more than one million people were added during the first nine months of 2023, which is higher than any other full-year period since 1867. The final population growth count for this entire year is estimated to come in at 1.2 million, according to a Scotiabank analyst, Rebekah Young.
The glaring issue with rapid population growth
The cost of housing continues to go up even when Canadians on average are making less money in recent years. This is simply because the amount of new homes being built is not enough to support the quick rise in population. BMO Capital Markets senior economist Robert Kavcic explains that the country has to build 680,000 new homes at 2.5 people per household to sustain our current level of population growth. However the industry is working all-out to complete just 220,000 homes per year.
Thoughts for 2024 and beyond
A new Statistics Canada report shows employers were looking for fewer workers across much of Canada in the third quarter of this year compared to the previous three months as job vacancies fell and unemployment rose.
With falling GDP per capita, rising unemployment (now at 5.8%), and more competition to find basic housing, it’s not a surprise that many people are calling for lower immigration targets. Since the economy is not at full employment, bringing more people here will only make it harder to find a job, push wages down, and make things worse. But I’m not optimistic these issues, especially housing affordability, will go away any time soon. The policy makers who set national immigration targets and the city workers who approve local building permits are not the same people. So I think for the next 5 to 6 years, until 2030 we’re going to see even higher housing costs.
The only thing we know with some level of certainty is that Canada will have more and more people over the next several years. So I’m bullish on real estate, utility, telco, and bank stocks in the medium to long term because these are all things people can’t live without. 🙂
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Random Useless Fact:
Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)