Of Alberta population growth and the stress test as an election issue
While population growth influences housing, the source of the growth is more telling in how much effect overall growth will have on housing.
Growth is always measured in net numbers in the categories of natural growth (total births minus total deaths) and immigration (interprovincial and international) as the difference between those arriving and those leaving.
Over the last five years, Alberta has averaged a natural growth of 8,000 per quarter. Natural growth will affect housing if parents need larger accommodations for their growing families, with the biggest effect likely felt in newly built homes in the suburbs, where prices are lower.
Permanent international immigration has been averaging close to a net of 9,000 per quarter, says ATB. International immigrants are likely to look for homes in areas that have larger numbers of people from the countries they came from, which could be in established neighbourhoods or new, developing neighbourhoods.
“The number of temporary residents has fluctuated with economic conditions, ranging from a positive net inflow of over 7,500 in 2013 to a net outflow of about the same amount in 2015,” says ATB. “Temporary residents include international students and workers under the temporary foreign worker program.”
Depending on how long temporary residents plan, or are allowed, to stay in Alberta, they are most likely to rent housing. The area where population fluctuation has had the most effect on Alberta is interprovincial migration.
“Before the recession, this had consistently brought in 5,000 to 10,000 net new people each quarter,” says ATB. “Between 2015 and 2017, however, Alberta experienced a net outflow of migrants to other provinces. It has recently returned to slightly positive in 2018.”
Until interprovincial migration regains its strength, Alberta cannot claim to be com- pletely out of the recession.
And now the stress test.
I’ve spilled a lot of ink on it over the last few weeks and now it looks like it will be a federal election issue next year.
Canadian Real Estate Wealth (CREW) is reporting online that Calgary Conservative Member of Parliament, Tom Kmiec, has pledged to put the stress test on the agenda for the election in October 2019.
“It will be an election issue, absolutely,” Kmiec told CREW. “I’m willing to use procedural tools to get this study done. I’m not necessarily saying to get rid of B-20 completely; I’m saying take a look at the data and then make a decision on it. I’m asking the Liberals to provide any internal documents they have showing why the mortgage rules were introduced in the first place.”
As the deputy shadow minister for finance on the Standing Committee of Finance, Kmiec has twice tabled motions this year to review the impacts of the stress test, known as B-20. Real estate boards, real estate companies, the Canadian Home Builders’ Association and other organizations have all acknowledged the stress test is preventing thousands of Canadians, particularly first-time buyers, from getting into homeownership. Despite this, the Liberal majority on the committee twice rejected Kmiec’s motions, without so much as reading them.
Kmiec told CREW he won’t wait for the election campaign to begin to renew his pursuit of a stress test review.
“If it comes down to it, I’m happy to use up every two-hour time limit on every single committee until we agree to do a mortgage study,” he said. “I’m not asking for the moon, either. All I want are a few meetings in Ottawa where we can invite people with data who can then tell us what’s happening with the market.”
Kmiec has launched a website about the stress test at www.StudyB20.ca