Tariffs, Migration, and Mortgages: Three Stories Moving Toronto Housing
This is my monthly news roundup, and this time I want to walk through three stories I read recently that struck me as important. One is about trade, one is about immigration, and one is about who is actually carrying mortgage debt in Canada. Each of them touches the housing market in its own way.
The Tariff Threat and What 6% Really Means
Official bodies have said that if Canada enters a trade war, it could face the second largest recession in its history. Based on Bank of Canada data, this kind of trade war hurts both countries, but Canada takes the bigger hit. If 25% tariffs come into effect, the estimate is that 6% of the country's GDP could be wiped out in just a few weeks. That is a very heavy blow. Exports and investment would fall, and consumption would drop too because of a weaker job market and trade problems. What made this report interesting was how it explained what 6% actually means. To put it in perspective, if Canada lost provinces like Nova Scotia, New Brunswick, Prince Edward Island, and a few other regions, the damage would still be less than 6%. In this forecast the United States also runs into slower growth and higher inflation, and it could even affect the global economy.
A Record Wave of Temporary Residents Leaving
The next story is about immigration data, and it set a record. A large number of temporary residents left Canada in the third quarter of 2024. The figures show the departures matched predictions, and it looks like the new rules limiting immigration are already having an effect. About 250,000 people left in the summer of 2024, an 85% increase compared with the year before. We have never seen this many temporary residents leave in a single season. Even so, 296,000 new people still arrived. Official reports say the main reason for leaving was people losing hope of getting permanent residency.
Why the Migration Shift Matters for Rent
Canada's population has grown very fast over the last few years, and the government now wants to ease some of that pressure. Since 2021 the temporary resident population has grown 150%, reaching 2,960,000 people, a number that is hard for any country to manage. The government plans to cancel about 450,000 temporary visas without replacing them. This year roughly 1.2 million visas are expected to expire, and close to 1 million of those people will not be able to get permanent residency. In the coming months I think we will see the effect of these sudden changes in the housing market, especially in the rental market.
Seniors Hold More Mortgages Than the Young
The third story is that older Canadians are now more likely to have a mortgage than younger ones. Bank of Canada mortgage data shows that seniors hold more mortgages than people under 35. If you compare this with the age of borrowers when they take out a loan, you see that young people have about half the chance of buying a home that earlier generations had. Right now nearly half of mortgage debt sits with people aged 45 to 64, who are at the peak of their earning years. About 26% of these loans belong to households aged 35 to 44. So if you add it up, roughly three quarters of mortgages are held by these two age groups. The rest is split between the young and seniors, but seniors outnumber the young. People under 35 hold just 12% of mortgages, while those over 65 hold 14%.
Why Younger Canadians Are Stepping Back
Young people today become homeowners less often than earlier generations. Part of it is the lifestyle they want. Many of them no longer place the same value on owning a home, and they prefer the freedom of renting so they can move whenever they like. Bank of Canada data confirms that today's youth buy far fewer homes than past generations. The numbers also show that many Canadians enter retirement still carrying a mortgage, which is no surprise given that reverse mortgages are one of the fastest growing parts of the market.
These three stories pull in different directions, but together they say a lot about where housing could go this year. If you want to set up a meeting and talk through your own plans, fill out the form at the bottom of this page or book a free consultation. Stay well and take care.
Frequently asked questions
How badly could tariffs hurt Canada's economy?
Bank of Canada estimates suggest a 25% tariff could wipe out about 6% of GDP within a few weeks, hitting exports, investment, and consumer spending. That is described as potentially the second largest recession in the country's history.
Why are so many temporary residents leaving Canada?
About 250,000 left in summer 2024, an 85% jump from the year before, mostly because they lost hope of getting permanent residency. The government also plans to cancel roughly 450,000 temporary visas.
Are younger Canadians buying fewer homes?
Yes. People under 35 hold just 12% of mortgages while those over 65 hold 14%. Many younger people also prefer renting for the flexibility, so ownership rates are well below past generations.