An Ontario college just announced a 10,000 job lay off in what they called a monumental decline in student enrolment.

This is the symptom of a massive shift in our immigration policy, starting with student visas at the Federal level. I noted it in a previous blog but the puppy mill style colleges taking advantage of our loose PR policies are coming to an ungracious and well deserved end. But the rental and real estate markets will continue to stagnate along side, for quite some time.

This is not a wait for the market to ‘turn around’ next year situation, this is a fundamental policy shift that will stagnate our real estate and rental markets for years to come.

Immigration Reductions Are Just Getting Started

Immigration targets are going to continue to decline into 2026 and 2027. And the result will likely be a continuous net migration out of major markets like Vancouver and Toronto over the next few years.

On the Federal level, new Temporary resident targets in 2026 are going to be 25% less than they are in 2025.

Permanent resident targets are going to be reduced by 5% annually from current targets as well, which is down over 20% from 2023 levels.

All things considered, this is just a return to a normal and rather healthy intake of immigration over the next several years. Consider it a bit of a hangover to what was frankly a completely idiotic approach to immigration policy post-covid. Something I ranted about numerous times.

The result still tracks my future predictions. It’s going to be a stagnant-at-best real estate market until about 2029 when a fundamental supply shortage due to a cost-to-deliver housing crisis that is playing out currently.

Aggressive policy shifts could change the trajectory, such as reintroducing foreign buyers or restarting aggressive immigration targets. We may even see healthier markets where homes sell a bit faster and easier than they do now, but as for any noteworthy price increases, I can’t see it happening anytime soon.

Unrealistically priced homes make up 90% of the current inventory

We are currently trending at all time highs for inventory in the Fraser Valley. I am currently working with 3 buyers right now and can confirm that although some sellers are finally beginning to come to their senses, 90% of what is available on the market is stuck at yesterdays price.

If you are considering selling your home in the next little while the advice I can give you is simple. You are not competing against last years sale on your street. You are competing with this weeks price drop. With a rather substantial drop in HPI benchmark prices in a few key areas, it’s evident the market is not going to turn around into a sellers market anytime soon.

Surrey Leads The Way In Price Drops

An interesting phenomenon as well is that Surrey is seeing the most substantial price declines, while Vancouver, Abbotsford and most surrounding areas are virtually stagnant rather than seeing any real noteworthy decline in price.

Clayton Heights and West Newton lead the pack with 6-7% HPI Benchmark price declines. A drop we haven’t seen since the skyrocketing interest rates of 2022.

The Fraser Valley in general saw a 1% decline in benchmark pricing month over month.

With the lowest year to date sales since stats began recording in 2005, and inventory continuing to stack up on the market I predict the rest of the year will be more of the same. If geopolitical headwinds persist we will continue to see very slow price declines that one or two interest rate cuts won’t solve.

The June numbers will be released in the first few days of July and thats when the headlines will hit. Although I can’t speak for other real estate boards across Canada, I can confirm that in the first half of 2025 we will have the lowest property sales since recording started in 2005 in the Fraser Valley.

That’s lower than Covid lockdowns, or the great financial crisis (2009), or even 2013 ...I still don’t know what the heck happened in 2013 but wow it was a slow year in real estate.

2025 Sales January-June: ~5850

2020 Sales January-June: 6459

2009 Sales January-June: 6209

Nothing to do with interest rates

I don’t believe this has anything to do with interest rates. Not to say that lowering the interest rates wouldn’t spur things on a little bit but you can currently get fixed rates under 4% or very close to. Historically speaking thats a pretty good interest rate.

In 2023 we had quite a boom during the spring season, I recall getting 10+ offers on a few of my listings. Interest rates at that time were around 5% (if you were lucky). And with price declines over the past 2 years, homes are actually substantially more affordable then during this period.

I think at this point it’s driven completely by sentiment. Everybody thinks the market sucks (it does) and it’s just a snowball affect.

It makes me think of the coiled spring effect. Having the lowest first half sales in history with the explosive population growth we have had since 2009 or 2013, sets the stage for an aggressive rebound.

When that is, is anybody’s guess.

A lot of people were calling the continuation of the Liberal party under Mark Carney “Trudeau 2.0” but there appears to be at least one glaring contrast between the two Liberal leaders and that is immigration policy.

Although most of the effects had already started taking place prior to Mark Carneys premiership, it’s clear he has every intention to continue the scaling back of immigration through all channels whether that’s work permits, student visas or permanent resident applications.

The policy change has already had noticeable effects with a 3.3% decrease in rents year over year across Canada. And a further restrictive immigration policy could have lasting effects on the real estate market as well.

Population Growth Virtually Stagnant in Q1

Canada added just 20,107 people in the first quarter, essentially no percentage change to quarterly population growth, compared with an average of 0.3 per cent over the past decade, Statistics Canada data showed Wednesday. Excluding the pandemic, it’s the slowest quarterly rate since comparable records began in 1946.

The largest decrease in non-permanent residents came from foreign students, with most of the decline occurring in Ontario and British Columbia. The two provinces recorded the largest quarterly losses in population since data collection began in 1951.

Carney’s government has introduced a bill with tougher rules on asylum claims, in addition to limits already in place on foreign students and workers. Lawmakers are set to debate the legislation on Wednesday. It’s an apparent move to deter international students from abusing the system and brace for a possible surge of refugees fleeing US President Donald Trump’s crackdown.

In summary, the population growth gravy train has come to an end. Now realizing it’s detriments after 10 years of explosive immigration - any rational leadership would be quick to scale back. This will continue for quite some time and I believe Toronto and Vancouver are going to be the most affected areas... But at least soon I won’t have to wait 8 days for a doctors appointment... (hopefully)