While Australia’s mainstream media and the university and property lobbies continue to lie about the impacts of immigration on the rental market, Canada has provided a dose of reality.
In the years following the pandemic, Canada experienced an unprecedented boom in immigration, which drove a record 1.2 million increase in the country’s population in 2023–04.
The impacts on the rental market were devastating.
Canada’s rental vacancy rate collapsed to a record low while rental inflation surged to all-time highs.
The Canadian Liberal government, facing an intense public backlash and a poll slump, introduced sweeping immigration cuts last year, aiming for only 0.3% population growth over three years.
The immigration cuts have already yielded results, with Canada’s population growth falling to only 0.2% in Q4 2024, aligning with the nation’s construction capacity.
The reduced population demand has also driven the sixth consecutive monthly fall in average Canadian asking rents.
The following charts show the impact of the rise and fall in Canada’s population growth (immigration) on the nation’s rental market.
The first chart plots rental inflation against the rate of population growth:
As you can see, there is a strong correlation between the two: as population growth rates rise, so do asking rents (and vice versa).
The following chart plotting the change in temporary migration against rental inflation shows the relationship even more clearly:
Source: Ben Rabidoux
As the rate of temporary migration rose, so did the growth rate in asking rents. As temporary migration rates fell, so too did asking rents.
The above data is further evidence of how the rate of immigration has a direct impact on the rental market. The demand side matters. Who would have thought?
Please consider sharing this post with any Australian academic or journalist who claims there is no relationship between immigration and rents. They are either ignorant, not very clever, or lying.
