Faulkner: Climate change migration and the future of real estate
Dennis Faulkner - Yesterday - Edmonton Journal
Canada is already at or near the top of the list of the best countries to live in. Alas, there is possibly another reason to move to Canada — climate change.
Forest fires and floods are some of the climate change effects that will affect where people live.
Forward thinkers and generational planners may see a move to Canada as the best way to thrive in a climate-changed world.
Some residents of California have moved because of the increase in wildfires. Many no longer feel safe. They have migrated to other parts of the United States, where the wildfire risk is much lower.
Declining river levels in the United States, including the Colorado River, Mississippi River and Missouri River, are reaching dangerously low levels.
California has to keep implementing new restrictions for the acceptable use of the precious waters of the Colorado River. Many farmers have had to limit and change what crops they grow in California because of the shortages.
The Colorado River runs down to Mexico or used to. Now what runs into Mexico is more like a trickle.
The Missouri and Mississippi Rivers are now so low that there are backlogs of vessels waiting to get to tidewater. These vessels contain grains and other products for world export.
The delay in getting food resources affects revenue for exporters and farmers and may contribute to food shortages in parts of the world.
On the West Coast of Canada, some waterways have dried up, which is affecting salmon’s ability to spawn.
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In the last several years, there has been an increase in the frequency and intensity of storms, droughts and wildfires. All these changes to our weather patterns come with great additional costs.
Climate change aside, the Canadian government has significantly increased our immigration quotas. Canada typically processes about 260,000 immigration applications each year. That level is increasing.
In 2019, Canada welcomed 341,000 new permanent residents. In 2021, we welcomed 401,000 permanent residents, which broke the old record set in 1913.
This year is expected to increase to as many as 420,000 applications processed, with even more increases expected in 2023 and beyond.
We will likely see more business and corporate migration to Canada, as well.
The increase in immigration is necessary to support our economy and replace our aging and retiring baby boomers.
This increased immigration will put upward pressure on housing demand. Rental demand will likely increase across the nation. Demand for home ownership will follow.
We already have a housing shortage in Canada. That shortage may be as high or higher than 2 million homes.
The recent rapid increase in mortgage rates has resulted in downward pressure on housing demand across Canada. Many areas of British Columbia and Ontario have seen significant drops in valuations since the beginning of the year.
Some are anticipating as much as a 30 per cent valuation drop in housing in regions of B.C. and Ontario. The prairie provinces did not appreciate significantly over the last 10 years and may not see much of a correction at all.
What affects values the most is the relationship between demand and supply.
The increased levels of immigration in Canada may reduce the amount of downward correction in values. Climate change migration could contribute to stronger housing demand in Canada for decades to come.
The prairie provinces could be at the top of the list of many new Canadians seeking housing affordability and employment opportunities. In the coming two to five years, we may see the housing values in prairie provinces significantly outperform many regions, including Ontario and B.C.
Canada could see a significant increase in immigration applications related to climate change issues in the years and decades to come.
Dennis Faulkner works as a realtor at Re/Max River City and holds a bachelor of arts degree with a major in macroeconomics. He can be contacted at hello@simplyrealestate.ca
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