Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is Canada, the country of dreams, where everyone I
Speaker 2: have come across wants to move. I moved here in
Speaker 2: August twenty twenty two.
Speaker 3: That's A Kanksha biswas. She's twenty nine, works in advertising
Speaker 3: and has a side hustle as a YouTube content creator.
Speaker 3: A Kanksha is originally from India, but lived in Australia
Speaker 3: for years until she made the move to Toronto two
Speaker 3: years ago. This is from a video on her channel
Speaker 3: where she talks about her decision to move to Canada.
Speaker 2: There were obviously ups and downs in this journey, but
Speaker 2: I knew this was the right thing.
Speaker 3: A Kankshaw told me before the move, she had a
Speaker 3: clear vision of what her life could be like once
Speaker 3: she got there.
Speaker 2: Canada always felt like a really attractive country because I
Speaker 2: know a lot of people who moved here and whenever
Speaker 2: I spoke to them, they always gave like really good reviews.
Speaker 2: And my partner we thought, let's try out and then
Speaker 2: see how it is, because the cost of living was
Speaker 2: supposed to be lower heel.
Speaker 3: But when a Kancsha arrived in Canada, she quickly realized
Speaker 3: life there might be harder than she expected. It started
Speaker 3: with her housing search.
Speaker 2: When I came here and started looking, it just felt
Speaker 2: like the prices were going up every single day. So
Speaker 2: one day we are seeing a place for twenty two
Speaker 2: hundred dollars a month. The next day we would say,
Speaker 2: see the same listing about fifty dollars higher.
Speaker 3: And then the panic starts to set in. You got
Speaker 3: to find a place now or yesterday exactly.
Speaker 2: That's what was happening.
Speaker 3: A Kansha did eventually find a place, but she and
Speaker 3: her partner are paying higher rent than they expected. That's
Speaker 3: forced them to cut back on some expenses and save less,
Speaker 3: and it's got her questioning whether Canada is really the
Speaker 3: country of dreams she'd imagined.
Speaker 2: That made us like reconsider like long term wouldn't be
Speaker 2: feasible for us to live here, to stay in, like
Speaker 2: in a country where it's so hard to photo house,
Speaker 2: or whether raising a family would be all.
Speaker 3: Right or not. Many young people like a Kancsha are
Speaker 3: experiencing these kinds of cost of living strains. The post
Speaker 3: pandemic boom and immigration in some countries is exposing growing
Speaker 3: gaps between what's happening in the overall economy and at
Speaker 3: the individual level. And nowhere is that disconnect clearer than
Speaker 3: in the housing market.
Speaker 1: One common thread that we see across the advanced economies Canada, Australia,
Speaker 1: the UK IS is record immigration levels colliding with existing
Speaker 1: housing shortages.
Speaker 3: Randy tenthong Night is a Bloomberg Economics and government reporter
Speaker 3: based in Ottawa.
Speaker 1: Housing shortages have always been the issue, and so with
Speaker 1: the new demand coming in, that's this worsen the problem.
Speaker 3: On today's show, we talk with Randy about how decades
Speaker 3: of underbuilding is catching up with cities just as they
Speaker 3: need even more homes for new arrivals. How we got
Speaker 3: here and what local leaders are planning to do about it.
Speaker 3: That's coming up. I'm Sarah Holder. This is the big
Speaker 3: take from Bloomberg News. In the past few years. One
Speaker 3: country that's seen a very rapid increase in new residence
Speaker 3: is Randy's home base of Canada. And while immigration has
Speaker 3: become a hot topic in the US, Randy says are
Speaker 3: country's immigration rates actually pale in comparison to Canada's.
Speaker 1: To put it in perspective, so for every one thousand residents,
Speaker 1: Canada brought in thirty two people over the past year
Speaker 1: and compare with less than fewer than ten in the US.
Speaker 3: Canada's government encouraged this population growth with policies that made
Speaker 3: it a lot easier for people to move there, like
Speaker 3: few limits on temporary migration into the country and ambitious
Speaker 3: permanent immigration targets. When asked about these policies earlier this year,
Speaker 3: Canada's Prime Minister Justin Trudeau was unequivocally support One of
Speaker 3: the things that Canadians understand is that immigration remains an
Speaker 3: incredible strength and force for Canada and for the Canadian economy.
Speaker 3: Canada's embrace of immigration was partly driven by a desire
Speaker 3: to boost its economy. New migrants have long helped fuel
Speaker 3: the economic growth of other countries dealing with aging populations,
Speaker 3: declining birth rates, and labor shortages.
Speaker 1: For decades, advanced economies used to be able to rely
Speaker 1: on immigrants to expand workforces and boost economic output, and
Speaker 1: more recently these countries started grappling with the economic drag
Speaker 1: from aging populations, they started relying more on newcomers to
Speaker 1: fill in some of the shortages. So for a long time,
Speaker 1: even though there were more people coming in sharing the
Speaker 1: pie in these economies, the size of the pie also
Speaker 1: grew larger and we ended up with bigger slices, but
Speaker 1: that's not what we're seeing right now.
Speaker 3: Randy said that while Canada's economy has avoided a recession
Speaker 3: and is growing, many residents aren't seeing their own economic
Speaker 3: prospects advance at the same rate.
Speaker 1: If you're looking at a per person basis, some households,
Speaker 1: some people, especially younger generations and immigrants themselves, they're not
Speaker 1: moving ahead at all. A lot of people in the
Speaker 1: younger generations to look back and think, wait, my life
Speaker 1: was better a year ago, or they were better off
Speaker 1: a year ago, and this leads to general anxiety that
Speaker 1: people are feeling that there were dissatisfied with how the
Speaker 1: economy is growing.
Speaker 3: Randy says Canada's immigration and housing policies were not made
Speaker 3: with the current economic landscape in mind.
Speaker 1: There's nothing wrong with having an ambitious immigration policy, but
Speaker 1: that aspiration has to be matched with equally ambitious planning.
Speaker 1: Immigration led population growth, especially at the pace and scale
Speaker 1: we've seen after the pandemic, I think requires a change
Speaker 1: in the way we do things, especially on housing. We
Speaker 1: can rely on the same forces hoping that the market
Speaker 1: will eventually cash.
Speaker 3: Up what Randy's talking about is a problem that's been
Speaker 3: driving the affordable housing crisis in cities all around the world.
Speaker 3: There isn't enough housing supply to meet the demand. In Canada,
Speaker 3: recent immigration has only ratcheted up that demand. While two
Speaker 3: point four million people came to Canada in the past
Speaker 3: two years, the country added less than five hundred thousand
Speaker 3: units of housing. That means Canada absorbed a population larger
Speaker 3: than the entire state of New Mexico while building barely
Speaker 3: enough to house the population of Albuquerque.
Speaker 1: The immigration isn't really to blame for this housing problem,
Speaker 1: and I want to point out that this is also
Speaker 1: happening across a lot of advanced economy in Australia and
Speaker 1: in the UK as well. That there are regulations that
Speaker 1: restrict higher density housing. There are rules from municipalities that
Speaker 1: doesn't really support growth, right, there's nimbiism that doesn't really
Speaker 1: give way to new developments. There's a lot of things
Speaker 1: that's going on, but overall it is sort of create
Speaker 1: this environment where the country can't really build enough houses
Speaker 1: for this growing population. And when you add large influxes
Speaker 1: of immigrants in a short period of time, that's sort
Speaker 1: of worsening the housing shortages that we've seen.
Speaker 3: With supplies, so limited homes on the market have become
Speaker 3: a lot more expensive to rent or buy. And Randy
Speaker 3: says that in Canada, wages and income growth haven't kept
Speaker 3: up with these higher prices.
Speaker 1: Millions of Americans are also facing housing affordability crisis, but
Speaker 1: their real disposable income growth has stayed above the rise
Speaker 1: in home prices over much of the past two decades, right,
Speaker 1: but not so much in Canada or in Australia. Now,
Speaker 1: for example, the median price for homes in Toronto is
Speaker 1: now one point three million Canadian dollars, and that's nearly
Speaker 1: three times that of Chicago, a comparable US city. So
Speaker 1: you can see that housing affordability is not just about
Speaker 1: home prices, but also about income growth as well.
Speaker 3: Randy says that he's experienced the shock of Ottawa's rising
Speaker 3: housing costs firsthand.
Speaker 1: So my rents, for example, went up fourteen percent this year.
Speaker 2: Wow. Yeah.
Speaker 1: So and that's to show what does tumbling living standards
Speaker 1: look like for an average person. But for me, it's
Speaker 1: not going to be a dramatic change, right, But it's
Speaker 1: about slow adjustment, cutting back on some expenses to make
Speaker 1: up for this higher rents and other housing costs that
Speaker 1: we've seen. And it's not just me, it's my friends,
Speaker 1: it's people that I spoke with a lot of immigrants
Speaker 1: that are facing a similar situation.
Speaker 3: Coming up after the break. Since it will take government's
Speaker 3: time to build the millions of new homes needed, some
Speaker 3: of them are focusing on what they see as a
Speaker 3: shorter term fix, letting fewer people into their countries. We're
Speaker 3: back before the break, Bloomberg reporter Randy Tanthong Knight was
Speaker 3: telling us the countries like Canada have a problem. They
Speaker 3: have a lot of people coming in and not a
Speaker 3: lot of housing getting off the ground. One obvious fix
Speaker 3: build more.
Speaker 1: The Canadian government wants to add nearly four million homes
Speaker 1: by twenty thirty one to restore affordability, but that means
Speaker 1: doubling the pace of average annual housing starts that we've
Speaker 1: seen in recent years. Rights and similarly, the Australian government
Speaker 1: set a goal of one point two million new homes
Speaker 1: by twenty twenty nine, for example, and the industry players
Speaker 1: there said that looks increasingly unachievable.
Speaker 3: Part of the problem is a construction labor shortage, something
Speaker 3: that the housing crisis can also exacerbate.
Speaker 1: We've seen this playing out across these economy and there's
Speaker 1: a dilemma, sort of a cash twenty two situation where
Speaker 1: we need more workers skew trades people to help build
Speaker 1: more homes, but at the same time, we need more
Speaker 1: homes to house these workers and many more. So where
Speaker 1: do you fix this first?
Speaker 3: This seems like a vicious cycle.
Speaker 1: Yes it is, and part of the problem is a
Speaker 1: mismatch in labor demand and supply that we've seen right.
Speaker 1: It's also the under utilization of their skills. If we
Speaker 1: look at the type of jobs newcomers have, it's not
Speaker 1: as common to see skew trades or carpenters or plumbers,
Speaker 1: and some of that have to do with certification, lack
Speaker 1: of recognition of foreign experience and training, which adds to
Speaker 1: the barrier of newcomers going into those sectors.
Speaker 3: And how have political leaders responded to these issues? What
Speaker 3: are they doing about the housing crisis?
Speaker 1: The clearest strain from immigration that we've seen is in housing,
Speaker 1: and it it takes years to address this supply issues,
Speaker 1: especially when there's already an existing shortages even before you
Speaker 1: started bringing in new people. We start seeing governments cutting
Speaker 1: back on the demand side of the equation, and that
Speaker 1: means limiting the inflows of immigrants. So for Canada, the
Speaker 1: government here sets a target to cut the population of
Speaker 1: temporary workers, international students and asylum seekers by twenty percent
Speaker 1: over the next three years, right, and that's roughly about
Speaker 1: half a million people. The Australian government is also cracking
Speaker 1: down on student visas, and this adjustment, I think is
Speaker 1: an acknowledgment that there are limits to immigration fueled population
Speaker 1: growth and that once new arrivals sort of exceed the
Speaker 1: capacity of the country to absorb them, the standards of
Speaker 1: living actually started to decline.
Speaker 3: Longer it takes to fix this problem, the more likely
Speaker 3: it is that immigration itself will become a convenient scapegoat,
Speaker 3: and that anti immigrant sentiment may grow in these countries. Recently,
Speaker 3: a long running Canadian poll showed a sharp drop in
Speaker 3: public support for immigration. Forty four percent of respondents agreed
Speaker 3: with the statement there's too much immigration to Canada, compared
Speaker 3: with just twenty seven percent last year. Among people who
Speaker 3: said that Canada accepts too many immigrants, the most widely
Speaker 3: cited reason was that they may be driving up housing
Speaker 3: prices or making fewer homes available.
Speaker 1: We've already seen government started to adjust some of the
Speaker 1: policy to respond to this backlash. And so the longer
Speaker 1: this type of problem go on, and if somehow some
Speaker 1: political party use anti immigrant stands to win an election,
Speaker 1: that could really reverse the course of what we've seen
Speaker 1: over the past years. Right that we a lot of
Speaker 1: advanced economies have relied so much on immigration to state
Speaker 1: of economic drag from the economic drag from Asian populations,
Speaker 1: and if that were to reverse, there might be a
Speaker 1: longer term consequences.
Speaker 3: As for a Kancia, the twenty nine year old Toronto
Speaker 3: resident we heard from earlier, she's made a big decision
Speaker 3: to leave Canada behind. She applied for permanent residents back
Speaker 3: in Australia and recently got good news.
Speaker 2: Last year, we started thinking about it and then we
Speaker 2: just applied. We got the invite from Australia, so we
Speaker 2: were like, okay, we got it. Now I think it's
Speaker 2: time to move.
Speaker 3: But since Australia is facing many of the same housing
Speaker 3: challenges as Canada, I had to ask is she worried
Speaker 3: about finding an affordable place there too?
Speaker 1: I actually yes.
Speaker 2: When we were thinking about moving back to Australia. I
Speaker 2: was considering the fact that I will be able to
Speaker 2: vold a house in Australia as well. Keeping Sydney aside.
Speaker 2: I looked at other cities like Melbourne and Brisbane and
Speaker 2: there are houses that are still affordable in those cities.
Speaker 2: It's exciting, but I have no idea what's going to happen.
Speaker 3: Thanks for listening to The Big Take podcast from Bloomberg News.
Speaker 3: I'm Sarah Holder. This episode was produced by Adrianna Tapia.
Speaker 3: It was edited by Caitlin Kenney and Malcolm Scott. It
Speaker 3: was mixed by Blake Maples. It was fact checked by
Speaker 3: Jessica Beck. Naomi Shaven is our senior producer. Our senior
Speaker 3: editor is Elizabeth Ponso. The cole Beeamster Bor is our
Speaker 3: executive producer. Sage Bauman is Bloomberg's head of Podcasts. Please
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Speaker 3: It helps new listeners find the show. Thanks for listening.
Speaker 3: We'll be back tomorrow.