Liberal countries have been forced to address one of the main drivers of the housing cost crisis – immigration. Politicians have been gaslighting us for years about the negative consequences of immigration on the housing market despite warnings from analysts. The spike in inflation has raised the cost of goods and debt, with an emphasis on housing costs. Housing costs when you factor in home and rent costs, utilities, insurance, and other miscellaneous housing overhead, makes up as much as 70% of the Consumer Price Index (CPI) which is a gauge of inflation. Citizens are feeling the pinch as they are working to pay for shelter. There is no denying it any longer. Globally, immigration has become a focus of the discussion on housing market costs so much so that Canadian Prime Minister Justin Trudeau acknowledged the government failure to immigration’s negative consequences on housing costs.
Population growth in Canada is predominantly from immigration and temporary residents through international foreign student and worker programs. An aging population made Canada’s government to increase immigration to 500,000 by 2025. To put that into perspective, that doubles the number of immigrants welcomed into Canada in the last 10 years. Specifically, during the third quarter of 2023, there was an immigration population increase of 430,000, “…marking the fastest pace of population growth in any quarter since 1957.” 1
The Justin Trudeau administration was warned in 2022 that immigration was making housing more expensive. Immigration, Refugees and Citizenship Canada (IRCC) warned that the number of immigrants entering Canada could not keep up with the number of available housing units. The mass migration far exceeded the rate of construction and available inventory. The IRCC highlighted that “In Canada, population growth has exceeded the growth in available housing units.”
A rapid increase in the immigration population of Canada put immediate strain on the housing market. The Canadian government failed to account for the number of available housing units when enacting the liberal immigration growth policy. When you increase the demand in an already depleted housing inventory market environment, housing costs skyrocket as homes for sale and rent become far and few. There are more people competing for the same home. When you add inflation, rising interest rates and mortgage rates, rising cost of living, and debt in the equation, the housing market in Canada reached a breaking point.
The housing market crisis in Canada reached to such a point of failure that even now the liberal policy makers were left with no choice but to acknowledge the failure and change course. The citizens have unequivocally expressed their dissatisfaction as they have been stretched to the limits financially in housing affordability. What the liberal policymakers defended as a prosperous stance once looked at to gain favorable votes among the new immigration population are now seeing this as a liability among the Canada citizens.
At the end of 2023, many experts in immigration policy echoed the similar concerns of the strain on housing affordability. To name a few, the Bank of Canada, Deputy governor Toni Gravelle, and Mikal Skuterud delivered speeches warning that this population growth will raise rents and home prices further.
Fast forward to October 24, 2024 where Justin Trudeau has been forced to announce a curbing of Canadian immigration. Trudeau was compelled to acknowledge the failure of the government in balancing the growing immigration population with the housing inventory. He even defended tougher border policies.
Public sentiment is the driver in the sharp change in liberal policy that the Trudeau and Canadian government touted as a benefit to the country for years. This is no surprise as the citizens have reached that breaking point in paying more than half of their earnings on housing while being forced to accommodate the influx of immigrants. Nelson Wiseman, professor emeritus of political science at the University of Toronto, said “Many Canadians have turned against the recent growing immigrant and temporary worker/student influx because of the growing housing, health, education, and other welfare challenges. Ottawa has read the polls and is responding accordingly.” In other words, the liberal politicians have been forced to change position in order to keep power within the government.
The Canadian admission of failure and curbing of immigration is a microcosm of what has transpired in the United States. Americans are being stressed in housing costs which arguable makes up to 70% of CPI. The housing cost burden is greater than 50% in the majority of households as housing prices and rents have skyrocketed due to the lack of existing inventory and new construction. Immigration has been attributed to the average housing availability of 34 units for every 100 low-income qualifying household across all the states, predominantly concentrated in our metro cities. Rents have increased on average about 30% nationwide. Purchasing a home has become about 30-40% more expensive on average across all the states and some states have been seen a 100% rise in the cost of buying a home.
US liberal politicians can no longer continue supporting these inhumane policies that stifle Americans. The American people have expressed their dissatisfaction, and the liberal politicians feel their power slipping away. The Hill reported in September 2024 that “About 54 percent of respondents — 86 percent of Republicans, 58 percent of independents and 25 percent of Democrats — said they “strongly” or “somewhat” support a wide-scale effort to deport millions of immigrants, and 59 percent said they are closely following the “immigration situation at the U.S.-Mexico border.”3 For this reason, similar to Canada, many have tamped down the support of uncontrollable immigration and even in some cases begin to use language to suggest securing our border.
When it comes to the economic policies, Americans rank immigration policies second to inflation in topics for the upcoming US Presidential election. President Trump is the stalwart of strong borders and economic prosperity. The Trump immigration policies resonate with most Americans and will be a deciding factor in the election. The liberal policies of Biden-Harris have failed, and unlike Trudeau, they have not acknowledged it. They simply continue to blame others and now embrace a soft tough on border policy in a last attempt to appease voters. Just as the Canadian citizens, Americans have reached the brim, and the momentum is with Trump to improve the quality of life and provide long awaited relief.
1 https://www.cbc.ca/news/politics/ircc-immigration-housing-canada-1.7080376
2 https://apnews.com/article/canada-immigration-reduction-trudeau-dabd4a6248929285f90a5e95aeb06763
3 https://thehill.com/homenews/campaign/4885895-mass-deportation-immigration-poll/
October 27, 2024
By Sophia Georges
Copyright 2024 - Realsophy Real Estate, Sophia Georges
