|Gloria Nieto/The Globe and Mail|
With every report of continued strength in the remarkably stubborn Canadian housing market (and we have had more such indications this week), the question gets asked: How can Canada’s housing sector possibly keep this up?
National Bank Financial believes it has one compelling answer: Immigration.
In a report issued Thursday, NBF senior economist Matthieu Arseneau argued that Canada’s unusually high level of net migration in the 20-44 age group is underpinning a high rate of formation of new households in the country, and that has been driving housing demand. He noted that in 2012, Canada’s overall population growth in that age group was 1.1 per cent, compared with a decline of 0.3 per cent in the rest of the developed world. And that growth was entirely driven by immigration; without the influx of new Canadians, Canada’s population in this critical household-forming age group would have shrunk last year.
“There is reason to believe that the resilience of Canadian employment in the recent economic downturn has made Canada a destination of choice for foreigners looking for work,” Mr. Arseneau wrote. “In 2012, the country’s employment rate for residents born abroad was among the highest of the advanced economies.”
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