As Canada’s housing market continues to be whipped to new price heights, a survey of new immigrant home buyers in the country’s biggest real estate market suggests some may be willing to pay more than non-immigrants to land that first home.
In its year-end market round-up, the Toronto Regional Real Estate Board presented some survey results from Ipsos Public Affairs, which has been working with TRREB on market insight surveys since 2015. Where in the past Ipsos did research on the share of foreign buyers in the market, this year it tackled the path new immigrants take to home ownership. Among the findings was data that suggested a large share of new immigrants are home buyers within their first five years of arriving in Canada, and that in general they are more interested in home ownership than the non-immigrant population.
“We have this mythology of the poor immigrant coming in and they are going to be renting undesirable apartments for years and struggle to get jobs and education,” said Sean Simpson, vice-president, Canada, Ipsos Public Affairs. “Certainly that’s the experience for some groups. What this data is showing us is, after a couple of years, many of them are doing what the rest of us are able to do – and that’s buy a home.”
The Ipsos online survey sampled 1,000 potential home buyers and 2,500 homeowners. It found that among its immigrant respondents living in Toronto, 49 per cent now own a home after being here less than five years. Peel Region, which contains the cities of Mississauga, Brampton and Caledon, appeared especially attractive to newcomers. Of homeowners surveyed there, 43 per cent had arrived between six and 10 years ago, and fully 32 per cent in just the past five years.
Overall, 38 per cent of homeowner respondents had immigrated to Canada. Of those, 50 per cent had been in Canada for more than 21 years, 23 per cent arrived between 10 and 20 years ago and 27 per cent had moved here in the past 10 years. Among immigrants surveyed who did not already own a home, 33 per cent said they were likely to buy a home, compared to 26 per cent of the general population.
“I work with many first time home buyers,” said Navneet Bhasin, a Brampton-based real estate salesman with EXP Realty. “Some of them are moving from the [United] States. They had good jobs and money, and they are going for detached homes.
“The ‘struggle period’ is less for them than, let’s say, someone coming from India without a job, versus someone from the Middle East, Hong Kong or the U.S.,” who often have the ability to work remotely.
Unfortunately, even well-heeled newcomers can be shocked by how much a detached home can cost, and often they switch their attention to more affordable options. According to the Ipsos survey, newcomers are more than twice as likely to shop for a semi-detached home than other home shoppers.
“Among those likely to buy who have been here less than 10 years, 24 per cent are buying a semi-detached home, that compares to only 13 per cent of the general population,” Mr. Simpson said.
TRREB’s data has picked up the trend toward less expensive housing. While the largest segment of houses that sold in the 905 regions in 2021 were detached homes (more than 43,275 changed hands, up 18 per cent over 2020), sales of more affordable, ground-related home types such as condo townhouses and semi-detached grew even faster: up 25 per cent (16,197 sales) and 20 per cent (7,181 sales) respectively. Price growth was just as stark: the GTA average price for a detached home rose 34.2 per cent to $1.5-million, semis reached $1.178-million (up 34 per cent) and townhomes averaged $837,800 (up 27 per cent).
“Semis are definitely the most popular,” Mr. Bhasin said. “I sold a small 1,300-square-foot semi for $1.3-million. The market is crazy!”
The highest volume of sales for semis and townhomes was in Peel Region in January, with 175 semis sold (124 in Brampton alone, and double that of any other 905 region) for an average price of $1.24-million. Only the city of Toronto sold more townhomes in the same period (151 to 138, with an average sale price of $906,681). Detached prices in Peel also hit some of the highest levels in the country, even though the $1.78-million average price was $100,000 to $200,000 less than those in York, Halton and Toronto.
Paula Mitchell, a salesperson with Royal LePage Meadowtowne Realty who has worked in the Brampton region for 35 years, calls the competition for houses “absolutely insane” and says that, among the immigrant buyers who bid on her listings, the hottest price battles are over homes with room to grow. “They are teaming up with family members, and people are fighting over anything that has potential for in-law suites, or for extra income,” she said. “We had a listing and we had 33 offers. It sold for $300,000 over asking and it was new immigrants that bought it.”
Ipsos’s data suggested that, when talking about the price they’d be willing to pay for a home, newcomers looking to pay more than $700,000 say they’d be willing to pay close to $100,000 more than the average Canadian-born buyer.
Mr. Bhasin and Ms. Mitchell say they suspect relatively inexperienced agents might be behind some of that price inflation. They say they frequently see bidding wars in which buyers with a rookie or part-time agent bid well above market value for a home.
But Shenali De Mel, president of the Brampton Real Estate Board and a broker with Century 21 Millennium Inc., said she believes it’s more likely that price growth in Brampton is driven more by shortage of supply in a market driven red hot with demand. “I’d love to have data to support [the experience/price factor], but we do not have concrete figures,” she said.
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