Migration spurs BC housing demand

People moving to British Columbia from other countries and other provinces are adding to demand for housing, says a B.C. regional economist with Canada Mortgage and Housing Corp.

There is a strong relationship between net interprovincial migration and housing starts, Carol Frketich said.

"Between 1998 and 2002, B.C. recorded a net loss of just over 57,000 people to other parts of Canada, and housing construction slowed significantly," noted Frketich.

Since 2003, the province benefited from interprovincial migration together with increased new home construction.

"Low mortgage interest rates, increased employment and high levels of consumer confidence were also factors supporting higher levels of housing starts during this period," Frketich added.

Looking ahead, CMHC forecasts new home construction to reach 37,000 units in 2006, up from 34,667 starts in 2005, the highest level achieved in over a decade.

Migration-driven population growth also generates demand for rental accommodation. International migration is a key source of population growth, particularly for Vancouver, one of the top three most popular Canadian destinations of new immigrants.

Typically, new immigrants choose to rent before they buy a home.

CMHC's rental market survey shows the vacancy rate in Vancouver was 1.4 per cent in October 2005.

International migration added more than 38,000 people to the province's population in 2005.

CMHC forecasts a similar level of international migration in 2006.

Statistics Canada says B.C. gained 10,853 persons during the first quarter of 2006 with 654 people coming from other provinces and 10,199 people coming from other countries.

This is down slightly from the first quarter of 2005 when the province recorded a net inflow of 11,089 persons.

CMHC has been the national housing agency for more than 60 years, improving the living conditions and the well-being of Canadians through four areas of housing activities -- housing finance, assisted housing, research and information transfer, and export promotion. CMHC is committed to helping Canadians access a wide choice of quality, affordable homes, and making vibrant and sustainable communities and cities a reality across the country.

(contribution to Vanc Sun by Canada Mortgage and Housing Corp)