'Housing supply failing to keep up': New immigration reduction expected to impact B.C. housing

The Canadian government's plan to reduce the number of immigrants entering the country could impact B.C.'s housing affordability.

Prime Minister Justin Trudeau announced on Thursday that the federal government is cutting its immigration target to below 400,000 for the next three years.

According to Tom Davidoff, a housing expert and UBC associate professor at the Sauder School of Business, the provincial housing supply has been unable to match population growth.

“The reason we've seen prices rising in the last decade is not only a very rapid increase in immigration, but also housing supply failing to keep up,” said Davidoff.

Davidoff went on to say that other factors raising prices include high interest rates and concerns about a recession as governments try to reduce inflation.

He believes the next few years could be a rough environment for housing affordability.

“I think this reduction in immigration will make the increase in prices and rents less than it would have been otherwise,” said Davidoff.

“I don't know if we will actually get improved affordability.”

According to provincial data, B.C. welcomed 40,271 new residents from other countries in the first quarter of 2024.

The data shows the total number of non-permanent residents was 25,272.

The province says a record 137,393 non-permanent residents arrived in B.C. over the previous year, increasing the total number of non-permanent residents currently living in the province to 501,050.

The federal government said on Thursday that its goal is to reduce the proportion of temporary residents to five per cent of the population over the next three years. In July, it was 7.2 per cent.

Trudeau explained that the level of immigration was in response to the challenges the pandemic posed, allowing for labour needs to be addressed and maintaining population growth.

“We didn't get the balance quite right,” said Trudeau.

The Canadian Federation of Independent Business told CTV News Vancouver that the new targets will impact business owners across the country and province.

Christina Santini, CFIB’s director of national affairs, urges Ottawa to be attentive to labour market signals and respond accordingly if and when businesses lack local employees.

“Small business owners' heads are spinning right now because there have been so many changes and announcements in the last two to three months,” said Santini.

“Hopefully now we get a sense of the lay of the land and where the government is going and there's not further surprises down the pipeline.”

Tudor House Immigration Services in Vancouver has been monitoring the changes closely and has seen the immigration gates tighten.

Consultant and owner Chris Brown believes the new targets will create a more competitive environment.

“The majority are going to Vancouver, and that poses a problem because we don’t have enough jobs to support all of these people," said Brown.

Brown encourages clients to explore other areas outside of the city because, he says, their chances of getting residency will increase.