Immigration’s Role in Canada’s Rising Home Prices and Rents: A Federal Study

A new study by Immigration, Refugees, and Citizenship Canada (IRCC) has examined the role of immigration in the rising home prices and rents across the country. The study found that while immigration levels did contribute to the increase in housing costs, the impact was modest compared to other factors like local economic conditions and housing supply issues.

Key Findings: Immigration’s Modest Impact on Housing

According to the report, new immigrants were responsible for about 11% of the increase in average home prices and rents from 2006 to 2021 in municipalities with populations over 1,000. The effect was notably stronger in large urban centers. In cities with populations greater than 100,000, new immigrants contributed to 21% of the increase in median home values and 13% in median rent increases over the same period.

The study found that for every 1% increase in new immigrants, home values increased by 0.376%, while rents increased by 0.086%. The increase in rents was less significant due to the influence of rent control policies in many provinces. Nevertheless, the report highlights that new immigrants, many of whom rely on rental housing, still put pressure on demand and vacancy rates, especially in certain regions.

Regional Differences: Greater Impact in Urban Areas

The report emphasized that the link between immigration and rising housing prices was statistically significant only in provinces like British Columbia and Ontario. In contrast, in Alberta and Saskatchewan—where immigration grew significantly between 2011 and 2016—home values saw little change. The findings suggest that immigration’s impact on the housing market varies across regions, and local housing policies and supply challenges also play a major role in shaping housing prices.

Immigration may indeed increase the demand for housing, but the effect depends largely on how municipalities respond to that demand through new housing construction. Skilled immigrant workers, in particular, can help address labor shortages in the construction industry, potentially aiding in the development of new housing units.

Broader Economic Context: Immigration and Economic Growth

While the study acknowledges that immigration helps increase demand for housing, it also highlights its importance in supporting Canada’s workforce and maintaining economic stability. Immigration plays a crucial role in sustaining social services, particularly as Canada’s population ages and birth rates decline. The influx of working-age immigrants helps offset the burden on public services like healthcare and pensions, contributing to the country’s long-term fiscal sustainability.

However, critics argue that the rapid increase in immigration levels, particularly after the pandemic, has strained Canada’s housing, infrastructure, and public services. This has created affordability pressures and led to concerns over job opportunities, especially among young people in major urban centers like Metro Vancouver and Greater Toronto.

Housing Supply Remains Crucial

Overall, the report underscores that while immigration contributes to rising housing costs, it is far from the sole factor. Supply constraints, low interest rates, speculative investments, and local economic conditions all influence housing markets. The key takeaway is that increasing the housing supply is essential to meet the demands of Canada’s growing population and economy.

Do you think immigration is a major driver of rising home prices in Canada, or are other factors more to blame? Share your thoughts in the comments below.

More…

• https://immigrationnewscanada.ca/immigration-contributed-to-housing-crisis
• https://dailyhive.com/vancouver/canada-immigration-home-price-rent-increase-impact
• https://www.blogto.com/real-estate-toronto/2025/07/immigration-raised-home-prices-toronto